Gold Prices Rise to $3,350 Amid Geopolitical Tensions
The price of gold is being driven by a combination of factors, including a weakening dollar, geopolitical tensions, and speculation about the Fed's next moves, with investors awaiting economic data releases to determine the next move for the precious metal.
Gold prices have increased by 0.4% to $3,350.87 per ounce, driven by a weakening dollar and ongoing geopolitical tensions, while spot platinum and palladium also surged to their highest levels in years.
The European Union's decision to impose new sanctions on Russia and resilient US economic data have contributed to gold's gains, although the price struggles to break through a multi-week-old trading range hurdle near $3,370. The US Dollar remains under pressure due to Fed Governor Christopher Waller's dovish comments and concerns about the economic impact of US President Donald Trump's trade tariffs.
Investors are cautious about making aggressive bullish bets on gold, as they expect the Fed to delay cutting interest rates. A convincing breakout through the $3,370 barrier could trigger a rally, lifting the price to $3,400 and potentially testing the $3,434-3,435 area. However, failure to defend support levels near $3,283-3,282 could drag the price down to the June swing low around $3,248-3,247.
The market is waiting for economic data, including retail sales and jobless claims, to determine the next move. The Fed's next meeting is expected to be a rate hold, but a rate cut in September is seen as a high-probability event. The gold price had previously plummeted to $3,320 after speculation about Jay Powell's potential firing was denied, erasing earlier gains of about $60.
As the market continues to navigate geopolitical tensions and economic uncertainty, gold prices are likely to remain volatile, with investors closely watching the Fed's next moves and economic data releases for clues on the precious metal's future direction.