Gold Price Forecast: XAU/USD rallies 1% as Middle East woes spark flight to safety
- Gold price cheers risk-aversion on Middle East violence, briefly regains $1,850.
- The US Dollar rebound limits the Gold price advance while US Treasury bond yields drop.
- Gold price eyes a sustained rebound and critical US Nonfarm Payrolls data.
Gold price is building on Friday’s rebound, briefly recapturing the $1,850 barrier early Monday. Escalating geopolitical tensions in the Middle East are spooking markets, as they seek safety in traditional safe havens such as Gold price, the US Dollar, Treasuries etc.
Renewed geopolitical risks came to the fore after the Hamas militant group in Gaza, Palestine, militarily attacked Israeli towns in an unprecedented move. In response, Israel launched airstrikes on Gaza and declared war against the Palestinian enclave of Gaza on Sunday.
Gold price is also capitalizing on worries that the geopolitical conflict could risk a fresh upsurge in oil price, threatening global inflation and economic outlook. Oil prices are already up over 4%, in a reaction to the Middle East conflict, which could threaten Oil price supply.
However, further upside in Gold price appears elusive, as the US Dollar also gains upside traction on increased safe-haven demand.
Meanwhile, a holiday in Japan is also helping exaggerate the moves in Gold price, as investors now look forward to the Middle East developments, Oil price movements and the upcoming US inflation data for fresh trading impetus.
At the time of writing, Gold price is adding 0.94% on the day to trade at $1,850, hitting a fresh five-day high at $1,856 in the opening trades.
Gold price technical levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
