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Gold Makes Another Bid for $2,400 Amidst Geopolitical Jitters, Dollar Retraces

1 month ago

Gold prices embark on another attempt to breach the $2,400 mark as geopolitical tensions loom large. Despite hawkish undertones from the Federal Reserve, the US dollar retraces alongside Treasury yields, fostering a resurgence in risk appetite.

Market sentiment prompts profit-taking on long US dollar positions, prompted by the rally spurred by Fed Chair Jerome Powell’s hawkish remarks earlier in the week. Meanwhile, escalating tensions between Israel and Iran drive investors towards safe-haven assets such as US government bonds, pressuring Treasury yields.

Despite the correction in the US dollar and Treasury yields, gold prices struggle to maintain their rebound, slipping back towards the $2,350 region. The retreat in gold prices reflects market expectations of a delayed and gradual policy pivot by the Federal Reserve, reinforced by Powell’s comments.

In Thursday’s trading session, gold prices make another push towards the $2,400 threshold, buoyed by a further decline in the US dollar and Treasury yields. Investors closely monitor mixed Fed commentary and the evolving geopolitical landscape surrounding the Israel-Iran conflict.

On the geopolitical front, Israeli Prime Minister Benjamin Netanyahu asserts Israel’s sovereignty in making defensive decisions, following weekend attacks from Iran. Reports of Israeli airstrikes targeting Iran-backed Hezbollah in Lebanon raise concerns about escalating tensions across Israel’s northern border, bolstering demand for safe-haven assets like gold amidst ongoing geopolitical uncertainties.

Gold prices are likely to maintain safe-haven appeal amid geopolitical tensions unless forthcoming speeches from Fed policymakers alter expectations of a rate cut, currently anticipated for the September meeting. Additionally, US weekly jobless claims and housing data will offer further insights for gold traders in the day ahead.

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