Gold prices have experienced a sharp upward movement in recent days, driven by a combination of geopolitical turmoil and softer-than-expected U.S. inflation data, sending investors flocking to safe-haven assets.
The precious metal, which had been trading in a bullish pattern, broke above key resistance levels following a series of events that triggered market uncertainty. A surprise Israeli airstrike on Iranian military and nuclear sites escalated tensions in the Middle East, killing top Iranian figures and raising concerns of further conflict. This prompted investors to seek refuge in gold, traditionally viewed as a safe-haven asset in times of geopolitical risk.
Gold’s rally had been building for some time before the catalyst: the metal had already shown strong bullish momentum above its equilibrium, supported by Fair Value Gaps (FVGs) and consolidation just below significant resistance. The airstrikes served as the spark that propelled gold prices higher, reinforcing its safe-haven appeal.
Before the surge, analysts noted that the price of gold had been poised for upward movement due to several key factors, including:
Breakout level at $3,350: A critical support level, reinforcing bullish momentum.
FVG support zone: A confluence of support between $3,342 and $3,356, adding to the buying pressure.
Soft CPI data: A slower-than-expected U.S. inflation reading further weakened the U.S. dollar, making gold more attractive to investors.
Market Outlook: Bullish Sentiment for Gold
Looking ahead, the outlook for gold remains positive, as long as the price stays above the key $3,350 level. Analysts anticipate that the metal may continue its upward trajectory, potentially targeting new highs near $3,450 to $3,500.
For the bullish case to hold, gold must maintain its momentum, with a possible retest of the $3,375–$3,380 range. Key indicators for further upward movement include:
Liquidity sweep: A strong market move through the $3,375–$3,380 zone.
Rejection or bullish reversal: A rejection wick or bullish engulfing pattern could signal continued buying interest.
Confirmation of market structure shift (MSS): On lower timeframes, particularly in the 4-hour FVG zone between $3,390 and $3,420, further confirmation of upward movement could trigger a breakout.
If gold can break and hold above the $3,450 level, it could open the path for a continued rally toward the next liquidity targets near $3,480 to $3,500.
As geopolitical risks remain high and economic uncertainty persists, gold is poised to benefit from the ongoing flight to safety, with the potential for further price gains in the near term.
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