Gold prices have climbed by around 1.5% in Friday’s Asian trading, driven by growing concerns over the escalating tensions between Israel and Iran. As the situation intensifies, investors are turning to traditional safe-haven assets, including gold, amid rising uncertainty.
Israel has confirmed that it launched airstrikes on Iranian nuclear facilities in an effort to prevent Tehran from advancing its nuclear weapons program. In response, several Iranian media outlets reported that Iran is preparing to declare war on Israel and retaliate soon. The Iranian military issued a stern warning on Friday, stating that both Israel and the U.S. will face severe consequences.
In response to the rising threat, U.S. President Donald Trump called a National Security Council meeting at the White House, set for 3 p.m. GMT.
The market’s reaction has been to seek refuge in assets considered safe during times of geopolitical instability, such as gold, U.S. Treasury bonds, and the Japanese yen. Gold, in particular, has benefited from this trend, continuing its upward trajectory for the third consecutive day and reaching its highest price in seven weeks.
With the Middle East conflict showing no signs of easing, gold buyers are now targeting the record high of $3,500. This surge is largely driven by concerns over Iran’s potential response to Israel’s preemptive strikes on its Natanz nuclear facility. However, the strengthening demand for the U.S. dollar could limit gold’s rally.
Meanwhile, recent trade news, such as the imposition of new tariffs on steel derivative products, has had little effect on the markets, as geopolitical issues continue to dominate the headlines. The tariffs, which already affect many imported household appliances, will extend to additional steel products starting June 23.
Looking ahead, attention remains focused on Iran’s likely retaliation and the U.S.’s response to the escalating conflict. While the University of Michigan’s Consumer Sentiment and Inflation Expectations reports are due, geopolitical developments are expected to take precedence.
Markets are also pricing in a potential U.S. Federal Reserve interest rate cut in September, following softer-than-expected inflation data earlier in the week.
Gold has shown solid technical strength. After closing above the key resistance level of $3,377 on Thursday, the price has strengthened further on Friday. The Relative Strength Index (RSI) remains above the midline, suggesting there is still room for further price gains.
Immediate resistance is now at $3,450, with the record high of $3,500 in sight. On the downside, support is seen at $3,400, followed by the $3,377 Fibonacci level. If prices fall further, the 21-day Simple Moving Average at $3,325 could provide additional support.
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