Gold rallies for fifth day, with external risks mounting

RoboForex Analysis Department RoboForex

Gold rose to 5,350 USD per ounce on Tuesday, marking its fifth consecutive session of gains. Demand for safe-haven assets continues to grow amid the escalating conflict in the Middle East.

President Donald Trump stated that the United States will continue its strikes on Iran until the country loses its ability to pose a threat. According to him, the conflict could last a month or "much longer." In response, Iran has announced the closure of the Strait of Hormuz and threatened attacks on ships passing through this strategically vital energy corridor.

The worsening conflict has triggered a sharp rise in oil prices and intensified fears of accelerating US inflation. This has led to selling in US government bonds and a reassessment of expectations for further Federal Reserve rate cuts.

The market is now shifting its forecast for the next Fed rate cut to September, later than previously anticipated.

Technical analysis

On the H4 XAU/USD chart, the market is forming a consolidation range around the 5,353 USD level. A downside breakout would open the way for a continuation of the correction towards 5,130 USD.

Conversely, an upside breakout would open up potential for a wave towards the 5,599 USD level. The MACD indicator confirms the current momentum, with its signal line at highs and pointing strictly upwards

On the H1 chart, the market has broken below the 5,333 USD level, suggesting a continuation of the trend towards 5,166 USD, with the potential for the wave to extend further to 5,130 USD. The stochastic oscillator supports this scenario, with its signal line remaining above the 80 level and under pressure to turn lower towards the 20 level.

Conclusion

Gold's rally to record highs reflects escalating demand for safe-haven assets amid intensifying geopolitical risks in the Middle East. The conflict has not only boosted bullion but also lifted oil prices and stoked concerns about inflation, prompting markets to push back expectations for Fed rate cuts. While the short-term technical outlook remains bullish, traders are watching for potential corrections following such a strong upward move.

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RoboForex Analysis Department

RoboForex

RoboForex Analysis Department provides timely market insights, expert technical analysis, and actionable forecasts across forex, commodities, indices, and equities.

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