Gold Surges Above $4,130 as Middle East Tensions Boost Safe-Haven Demand
Gold prices extended their rally on Wednesday, climbing above $4,130 per ounce as escalating tensions in the Middle East fueled demand for safe-haven assets. The precious metal advanced despite a stronger U.S. dollar and rising Treasury yields, while investors continued assessing how higher energy prices could influence the Federal Reserve's interest rate outlook.
As of 09:08 WIB, XAU/USD gained 1.3% to $4,132.79 per ounce, while Gold Futures rose 1.5% to $4,137.09. Meanwhile, XAG/USD advanced 1.5% to $59.71 per ounce, and XPT/USD climbed 2.3% to $1,666.59 per ounce.
Middle East Conflict Keeps Inflation Concerns in Focus
Gold continued its nearly 2% rally from the previous session as traders monitored growing threats to global energy supplies. Persistent geopolitical risks could keep inflation elevated, complicating the Federal Reserve's monetary policy path.
Market attention is also shifting toward next week's Federal Reserve policy meeting. While policymakers are widely expected to leave interest rates unchanged, investors anticipate a continued "higher for longer" stance if energy-driven inflationary pressures persist.
Meanwhile, U.S. President Donald Trump reiterated that Washington remains open to negotiations with Iran, even as U.S. forces launched an eleventh consecutive night of military operations and Tehran continued its retaliatory attacks. Ongoing conflict around key global energy shipping routes, including the Strait of Hormuz and the Red Sea, remains a major concern for financial markets.
Oil prices held above $90 per barrel after extending July's rally, supported by continued military activity around the Persian Gulf and renewed concerns over regional supply disruptions.
Technical Outlook Turns More Bullish Above $4,120
According to Tony Sycamore, market analyst at IG, gold's ability to rally despite a stronger U.S. dollar and higher Treasury yields suggests investors are rebuilding positions in the metal as a traditional safe-haven asset amid rising geopolitical uncertainty.
"Gold closed higher overnight, shrugging off the headwinds from a stronger U.S. dollar and higher bond yields," Sycamore said. He added that cleaner retail positioning may also be helping restore gold's safe-haven appeal, even as U.S. equity markets continue to strengthen.
Sycamore noted that early signs of a price base have emerged around the late-June low of $3,942. A sustained breakout above the descending trendline resistance near $4,120, followed by a move above the early-July high of $4,202, would strengthen the case for a broader recovery toward the 200-day moving average near $4,494.
He added that IG remains cautiously bullish on gold as long as prices stay above the late-June low, which continues to serve as a critical technical support level.
Silver and Platinum Extend Gains
Silver also extended its rally after surging more than 4% in the previous session, while platinum posted strong gains as investors continued to monitor geopolitical developments in the Middle East alongside expectations for the Federal Reserve's upcoming policy decision.
Overall, safe-haven demand remains the primary driver of precious metals, with geopolitical uncertainty, elevated oil prices, and inflation expectations likely to dictate gold's near-term direction.