- Gold prices shoot after Israel continues to attack Iran, with attacks on nuclear facilities in ongoing Tehran.
- Xau/USD shoots at $ 3.340, with a 3,500 $ record in sight. The death tolls of the high officials of Iran increases.
- Michigan consumer’s feeling data and expectations of inflation in sight.
Gold (Xau/USD) is extending its profits as Israel’s attacks continue to Iran, supporting the demand of the precious metal of safe refuge.
Recent news indicates that the United States and Israel have warned that attacks will probably persist, which has led to an increase in gold prices, which currently quote $ 3,430.
In an interview with ABC News, US president Donald Trump said: “I think it has been excellent,” Trump said. “We gave them a chance and they didn’t take advantage of it. They were hit hard, very hard. They were hit as strong as you can hit. And there is more to come. Much more.”
In the US economic calendar, market participants will also be attentive to the results of the consumer’s feeling report of the University of Michigan and inflation expectations, scheduled for publication on Friday.
Gold prices are highly sensitive to changes in the feeling of the consumer, which makes the publication of the feeling of the consumer this Friday into a critical event to follow. As a leading indicator of economic trust and inflation expectations, the index offers an early vision of possible changes in American consumer behavior and price pressures.
Multiple nations, including Saudi Arabia and China, have condemned attacks. China’s Foreign Ministry spokesman, Lin Jian, said that “China urges all relevant parties to do more to promote regional peace and stability and avoid a greater climbing of the situation. China is ready to play a constructive role in helping to dispose of the situation.”
These developments and the increase in geopolitical risks increase the attractiveness of gold, which could continue to support prices.
What moves the market today: Israel’s attacks, Michigan’s feeling of the US in the focus
- In a publication on social networks, President Trump declared: “I would give Iran opportunity after the opportunity to make a deal. I told them, in the strongest words, that ‘they simply did’, but it does not matter how hard they tried, no matter how close they were, they simply could not do it,”.
- These comments have raised questions about US participation in attacks, which could cause geopolitical risks to intensify between the US and other nations that have condemned the attacks.
- In a publication on social networks, President Trump declared: “I would give Iran opportunity after the opportunity to make a deal. I told them, in the strongest words, that ‘they simply did’, but it does not matter how hard they tried, no matter how close they were, they simply could not do it,”.
- On Friday, Reuters and Bloomberg reported that Israel had attacked multiple facilities in Iran.
- Israeli Prime Minister Netanyahu confirmed the attacks, citing that Israel had “attacked the heart of Iran’s nuclear enrichment program.” Israel reports confirmed that approximately 100 objectives had been achieved using 200 combat planes.
- Several senior Iran officials have been killed, including Hossein Salami, the head of the Islamic Revolutionary Guard Corps, and the Chief of Military Personnel, Mohammed Bagheri.
- The tensions escalation arose on Thursday after the United Nations Nuclear Control Agency adopted a resolution that establishes that Iran is violating its obligations under the nuclear non -proliferation agreement. In response, Tehran announced plans to climb its nuclear activities, stating that it had no “other option to answer.” Uranium, the basic fuel used in nuclear energy, can be militarized when highly enriched. Iran continues to insist that its nuclear program is intended only for peaceful purposes.
- Trump confirmed Wednesday that American staff is being transferred from the Middle East parts due to the growing tensions between Israel and Iran. This occurs before the sixth round of nuclear conversations between the US and Iran, scheduled for this weekend, which since then have been canceled.
- In the Front of Economic Data, the publication of the US Price Price Index (IPP) data on Thursday showed that inflation is slowing down at the wholesale level. The general IPP showed an annual increase of 2.6% in May, in line with the forecasts of analysts, after an increase of 2.5% in April. The underlying IPP, which excludes volatile goods, fell to 3% in May, from 3.2% in April.
- IPP data followed the publication of the US Consumer Price Index (CPI) on Wednesday, which showed that consumer inflation continued to decrease in May.
- As for the publication of the University of Michigan, the operators will pay special attention to the expectations of inflation at one and five years included in the report, which are closely monitored by the Federal Reserve.
Technical analysis: gold prices rise to $ 3,340
Gold prices recovered on Friday after attacks, breaking over the old level of psychological resistance of $ 3,400, which has now become support.
The attractiveness of safe gold shelter raised the Xau/USD to its second highest peak of this year about 3,444 $, where the metal is currently quoting. The next resistance level remains $ 3,500, the record reached in April.
Meanwhile, the support remains firm at $ 3,400, with a downward movement leading to the level of $ 3,385. The latter is another crucial level that has limited the upward movement in gold prices several times throughout the week.
Daily Gold Graph (Xau/USD)
Meanwhile, the relative force index (RSI) is 62 and points up, indicating a bullish bias. Downwards, the psychological level of $ 3,350, which has provided support throughout the week, remains intact. Below that is 3,291 $, the fibonacci setback of 23.6% of the upward trend from January to April.
In order for the bassist impulse to win traction, a break in this area could pave the way to the next large psychological level of $ 3,200.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
