Gold Struggles Amid Ongoing Tensions in Middle East
Gold prices struggled to gain momentum as investors remained cautious due to ongoing tensions in the Middle East. Despite a weaker US Dollar, which usually supports gold prices, bullion failed to break through key resistance levels.
The conflict between the US and Iran continued to escalate, with reports of Saudi forces joining the fray and attacks on Iranian-aligned groups in Iraq. This development dampened investor enthusiasm for gold, causing prices to decline by over 1% on Tuesday.
However, the US Dollar's weakness, which was triggered by the Federal Reserve's decision to keep interest rates unchanged, allowed gold to stage a rebound on Wednesday. The Fed's hawkish stance, as emphasized by Chairman Kevin Warsh, also contributed to the Dollar's decline and gold's rally.
Despite the rebound, analysts at TD Securities caution that market expectations for rate hikes will continue to limit gold's bullishness. They note that the broader policy backdrop remains a constraint on gold prices.