Rising tensions in the Middle East and growing expectations of interest rate cuts by the U.S. Federal Reserve are pushing gold prices higher, according to foreign media reports cited by News.Az.
Israeli Defense Minister Israel Katz announced late Thursday that the country had carried out a preemptive strike on Iran and declared a state of emergency, preparing for possible retaliation. Prime Minister Benjamin Netanyahu confirmed the operation early Friday, saying the goal is to eliminate Iran’s nuclear threat. He warned that failing to act could lead other countries in the region to seek nuclear weapons. Netanyahu also said the military operation would continue as long as necessary.
Gold prices have risen for a second consecutive day, driven by fears over escalating conflict. Peter Grant, vice president and senior metals strategist at Zanier Metals, said that if gold breaks above $3,400 again, the next resistance levels are $3,417 and $3,431. He noted that a new all-time high seems likely if current momentum continues.
Adding to gold’s appeal, weaker-than-expected U.S. Producer Price Index data released on Thursday increased the chances of an interest rate cut by the Federal Reserve. This outlook has put pressure on the U.S. dollar and boosted demand for gold, which is priced in dollars.
Traders now anticipate a 25 basis point rate cut by September and expect another one in October. Before the latest inflation data, markets had expected the Fed to wait until December to make a second move.
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