Gold breakout scenarios: Safe-haven demand surges after Israel-Iran escalation plus soft-CPI fuel
|- Gold pushed to the upside after soft CPI and added fuel to the Israel-Iran bombing.
- Price was already bullish above equilibrium with strong FVG support, just waiting for a catalyst to break higher.
- As long as $3,350 holds, bulls may push toward $3,450–$3,500; a break below could flip momentum to the downside.
Gold poised for upside targeting $3,400
Gold just broke out sharply to the upside, but for those paying attention, this move wasn’t a surprise.
Earlier this week, gold had already been trading above its equilibrium, showing strong bullish structure, forming Fair Value Gaps (FVGs), and consolidating just beneath major resistance. The only thing missing was a catalyst.
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1st catalyst: Soft CPI
CPI release this week acted as the 1st catalyst, allowing gold to spike to the upside, testing the level for an upside move.
This move was also supported by 4-hour bullish FVGs.
And then it came.
2nd catalyst: Israel bombing Iran
Israel launched surprise airstrikes on Iranian military and nuclear targets, shaking global markets and triggering a rush into safe havens, with gold at the top of the list.
The attack, which reportedly killed top Iranian commanders and scientists, triggered serious concerns and drove investors toward safe-haven assets, with gold leading the flight to safety.
The result? A powerful surge in gold as investors sought protection amid rising geopolitical risk.
Before gold’s surge, the bullion had already been gearing up for the next leg higher with confluences supporting an upside move:
- $3,350 breakout level turning support.
- Added support with 4-hour FVG resting at $3,342-$3,356.
- Soft-CPI on US dollar.
Scenarios to anticipate
Bullish case for Gold
As long as we stay above the $3,350 level, we’d like gold to push up for new highs until the all-time high level at $3,500.
Retest of the $3,375–$3,380 FVG zone with:
- Liquidity sweep.
- Rejection wick or bullish engulfing candle.
- Confirmation via MSS (Market Structure Shift) on lower timeframes at the 4-hour FVG resting between $3,390-$3,420.
- Break and hold above $3,450, opening the path to the next liquidity target near $3,480-$3,500.
Bearish case for Gold
A failure to hold $3,375 on the pullback could indicate a false breakout. A divergence or rejection below $3,434 resistance may form a lower high structure.
- FVG between $3,390-$3,420 fails to hold.
- Break below $3,350 could increase downside risk.
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