Fed Chairman Powell supported neutral interest rates amid rising US bond yields. As tensions escalate in the Middle East, the gold price is poised to recapture its highest level in five months.
Demand for gold increases as geopolitical tension escalates
Tensions in the Middle East continue to rise. cryptokoin.comAs you can see from , this increases the flight to safety in the market. On the other hand, US Federal Reserve (Fed) Chairman Jerome Powell supported a stable interest rate policy in his speech on Thursday. Amid these developments, the gold price rose sharply.
Demand for bullion increased as Israeli troops prepared to enter the Gaza strip to disperse the Palestinian military group Hamas. This became an important catalyst for the gold price. Meanwhile, US President Joe Biden has promised humanitarian aid for civilians in Gaza. However, despite this, it is possible for Iran to step in and directly intervene in the conflict. This is likely to turn into a frightening Middle East regional war.
Commerzbank: There is no upside potential for the gold price!
Despite the rise in bond yields, gold rose to around $1,993, its highest level in three months. Gold’s upside potential is likely exhausted, according to Commerzbank economists. In this context, economists make the following assessment:
If conflicts in the Middle East escalate or expand, the gold price is likely to make additional gains. But otherwise, its upside potential will likely be exhausted. We think that gold prices can only achieve more sustainable gains when there are signs of a turnaround in the US interest rate policy in response to the weakening we expect in the US economy.
Gold price technical view: Markets are having a bullish week
Gold markets initially retreated throughout the week. However, it later started to show signs of revival. Here’s how technical analyst Christopher Lewis portrays gold’s technical outlook.
Gold price It initially pulled back slightly during the trading week. However, It found support near the 50-Week EMA and then bounced back to show signs of strength. Ultimately the market is 2,000 dollar reached the level. A.But it looks like we’re retreating a bit. 2,000 dollar It is not yet clear whether we will be able to rise above this level. A.However, this level is a big, round, psychologically important number that we need to pay close attention to. B.Therefore, it is worth noting that going above this level will attract a lot of attention. If he can get above this, the next timeIt will be around $2,050. But I think a short-term pullback will probably be on the cards. This will offer enough value for people to get involved, especially if we can get down to $1,950. The gold market is of course very unstable at times. So none of this comes as a surprise.
In the meantime, you need to pay close attention to the bond markets in America. Because if these yields continue to rise, it is possible that this will put downward pressure on the gold price. There’s also the possibility that investors may want to take advantage and collect profits heading into the weekend. If this is the case, the $2,000 level is also likely to pose some hurdle. Ultimately, much of this comes down to tensions in the Middle East. If these tensions begin to ease a little, this is likely to put downward pressure on gold. Either way, I think at best you’ll run into a situation where you want to buy dips at this point, perhaps on the daily chart.
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