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Gold Surges Past $3,000 Amid Rising Geopolitical Tensions

Gold prices have soared to record highs above $3,000 per ounce early Tuesday, driven by escalating geopolitical conflicts in the Middle East. The renewed military actions between Israel and Hamas, coupled with heightened US-Iran tensions, have fueled a surge in safe-haven demand for gold.

Gold (XAU/USD) Technical Overview

  • Current Price: $3,018.06
  • Key Resistance Levels: $3,050, followed by a potential move toward $3,100.
  • Key Support Levels: Initial demand near $2,980, followed by $2,956 (previous triangle resistance-turned-support) and $2,929 (21-day Simple Moving Average).

Gold has successfully broken above an ascending triangle formation, confirmed last Thursday, signaling a strong bullish continuation. The 14-day Relative Strength Index (RSI) is nearing the overbought zone at 69.50, suggesting more room for upside momentum.

However, if a correction occurs, traders will eye $2,980 as the first support level, with deeper pullbacks potentially targeting $2,956 and $2,929.

Fundamental Factors Driving Gold’s Rally

Geopolitical Risks at the Forefront

  • Israel-Hamas Conflict Intensifies
    The ceasefire between Israel and Hamas collapsed as Israeli forces resumed military strikes on Gaza, with reports of over 100 casualties. Israeli Prime Minister Benjamin Netanyahu accused Hamas of rejecting a proposed hostage-release deal, brokered by US envoy Steve Witkoff.
  • Escalating US-Iran Tensions
    Unconfirmed reports suggest that a US military strike may have sunk an Iranian intelligence-gathering vessel near Gaza. Over the weekend, the US launched airstrikes on Yemen, targeting Iran-backed Houthi militants, who retaliated by attacking US vessels in the Red Sea.

With tensions rising, investors are rushing to gold as a safe-haven asset, further propelling prices upward.

US Economic Uncertainty & Trade War Impact

  • US Trade War & Tariff Fallout
    The White House reaffirmed that reciprocal tariffs will go into effect on April 2, intensifying fears of a prolonged global trade war. Investors remain wary of the economic fallout, which is further supporting gold’s rally.
  • Weaker-Than-Expected US Retail Sales
    US Retail Sales for February rose only 0.2%, far below the 0.7% forecast, adding to concerns about a potential economic slowdown.
  • US Dollar & Federal Reserve in Focus
    Despite recent dollar weakness, the USD found fresh buyers on Tuesday, as investors sought a dual flight to safety in both gold and the greenback. The focus now shifts to Wednesday’s Federal Reserve policy announcement, which could impact gold’s next move.

What’s Next for Gold Prices?

Gold’s trajectory will likely be dictated by two key factors:

  1. Geopolitical Developments – Any further escalation in Middle East conflicts or US-China trade tensions could drive gold beyond $3,050, with the potential for a move toward $3,100 or higher.
  2. US Economic Data & Fed Policy – If the Federal Reserve signals a dovish stance, it could weaken the US Dollar, further fueling gold’s rally. Conversely, a hawkish Fed could trigger profit-taking in gold, leading to a temporary correction.

For now, gold remains firmly in bullish territory, with any dips likely to attract renewed buying interest.

Final Thoughts

With geopolitical risks mounting, trade war fears growing, and economic uncertainty lingering, gold’s appeal as a safe-haven asset remains strong. While short-term profit-taking could lead to temporary pullbacks, the overall trend suggests gold could continue setting new records in the sessions ahead.

Stay Updated with Daily Forex Pakistan.
Hamza Shah

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Published by
Hamza Shah
4 months ago

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