- Summary:
- Gold price has risen to new record highs and is likely to keep soaring as an escalationof the Middle East conflict adds tailwinds.
Gold price rose to new record highs of $3,045 per ounce at the spot on Wednesday as traders repositioned themselves ahead of a Federal Reserve interest rate decision. The sharp gains by the yellow metal underlines the rising risk aversion in the market, fueled by concerns over the broadening trade tariff wars. Also, an uptick in geopolitical risk in the Middle East has added fuel to the commodity.
The Federal Open Market Committee (FOMC) members are to make a critical decision in balancing the pressure on caused by high interest rates and the inflation driven by the sour trade tariff ecosystem. Analysts forecast that the Fed will opt to keep the rates unchanged at 4.5%. A surprise rate cut could could add strong propulsion to gold price.
XAUUSD was already being propelled by the broadening economic risks created by the high tariffs and counter-tariffs among the United States and its key trading partners. That risk is likely to rise in April as a new set of US “reciprocal” tariffs kick in.
In the intervening period, the escalation of Israel-Hamas conflict will provide fuel to sustain the upside. Israel commenced a new wave of airstrikes against Gaza on Monday, with Prime Minister Benjamin Netanyahu stating that the war was back in “full force”. This has added geopolitical risk premium on gold price.
Gold Price Prediction
The momentum on gold price favours it to continue with the upside above the pivot mark at $3,023. The metal will likely meet the first resistance at $3,046, but a stronger momentum will breach that level and potentially send it higher to test $3,060.
On the other hand, breaking below $3,023 will favour the sellers to take control. Such a scenario could potentially send the action lower to find the first support at $3,010. The upside narrative will be invalid if the price breaks below that level. However, an extended control by the sellers could take the XAUUSD lower to test $3,000.
