- Gold price appreciates as traders exercise caution amid concerns about escalating tensions in the Middle East.
- Jordan's Foreign Minister Ayman Safadi warned that Israeli retaliation against Iranian strikes could potentially escalate the conflict throughout the entire region.
- The correction in the US Dollar supports the demand for the yellow metal.
Gold price recovers its recent losses, trading around $2,370 per troy ounce during the Asian session on Thursday. The safe-haven yellow metal gains ground as traders exercise caution amidst heightened geopolitical tensions in the Middle East.
According to reports from Reuters, Jordan's Foreign Minister Ayman Safadi stated in an interview released by state media on Wednesday that Israeli retaliation against Iranian strikes could pose a significant risk of dragging the entire region into a devastating war.
Furthermore, Israel's Air Force announced on Wednesday that its fighter jets had targeted Hezbollah infrastructure north of Baalbek in eastern Lebanon. Concerns are rising that increased exchanges of fire between Israel and Hezbollah could lead to further escalation.
Prime Minister Benjamin Netanyahu of Israel asserted that Israel would make its own decisions regarding how to defend itself, as Western countries urged restraint in responding to a series of attacks from Iran.
Meanwhile, the US Dollar Index (DXY) loses ground, primarily influenced by subdued US Treasury yields. This correction in the US Dollar is to make Gold less expensive to buy for investors using other currencies.
Federal Reserve Bank of Cleveland President Loretta Mester, speaking on Wednesday, acknowledged that inflation has surpassed expectations. She stated that the Fed requires further assurance before confirming the sustainability of 2% inflation.
Additionally, Fed Chair Jerome Powell commented on Tuesday that recent data indicates limited progress in inflation this year, suggesting an extended period before reaching the 2% target. This statement potentially signals a hawkish stance on upcoming monetary decisions from the Fed. Higher interest rates could diminish the demand for non-yielding assets like Gold.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.