Gold Price Stuck Between Safe-Haven Demand and Rate Hike Expectations
The price of gold is currently stuck between two opposing forces, safe-haven demand and rate hike expectations.
Geopolitical turmoil, particularly in the Middle East, has boosted demand for gold as a safe haven. Recent US airstrikes against Iranian targets have sent risk aversion rippling through global markets, pushing Brent crude above $100 a barrel.
The situation is further complicated by the Federal Reserve's hawkish stance on inflation, which gives policymakers room to keep monetary policy tight. The Fed left its benchmark rate unchanged this week at 3.50 to 3.75 percent, and markets now assign roughly 63 percent probability to a September rate hike.
The World Gold Council has flagged rising unofficial gold inflows into India, where higher import duties have pushed demand through informal channels. Technical analysts see gold at a pivotal juncture, with buyers having broken through a key diagonal resistance line this week.