Gold prices climbed approximately 1.5% in Asian trading on Friday, fueled by a sharp flight to safety amid escalating geopolitical tensions between Israel and Iran.
The precious metal is now approaching its all-time record high of $3,500 per ounce. Earlier, Israel announced a targeted strike on Iranian nuclear facilities, aiming to hinder Tehran’s development of atomic weapons.
In response, multiple Iranian media outlets have signaled that Iran plans to declare war on Israel and mount a “soon” retaliation. The Iranian Armed Forces’ General Staff issued a stern warning on Friday, declaring that Israel and the United States “will pay a very heavy price” for the attack.
Amid rising tensions, U.S. President Donald Trump scheduled a National Security Council meeting at the White House Situation Room later in the day at 15:00 GMT.
In times of uncertainty and market volatility, investors traditionally seek refuge in safe-haven assets such as gold, U.S. Treasury bonds, and the Japanese yen. This dynamic has driven gold prices higher for a third consecutive day, reaching their highest level in seven weeks.
With the Middle East conflict intensifying, gold buyers are eyeing the historic $3,500 mark, especially if Iran retaliates strongly following Israel’s pre-emptive strikes on its primary uranium enrichment facility in Natanz.
However, the rally in gold may face headwinds from a strengthening U.S. dollar, which also benefits from haven demand amid geopolitical turmoil.
Meanwhile, market participants appear to be sidelining recent trade developments. Reuters reported that tariffs on various imported household appliances, currently set at 50% for most countries, will soon extend to a broader range of steel derivative products starting June 23.
Looking ahead, global attention remains focused on Iran’s likely response to the Israeli attacks and Washington’s strategy in the escalating Middle East crisis.
Economic indicators such as the University of Michigan’s Consumer Sentiment and Inflation Expectations are expected to take a backseat to the prevailing geopolitical headlines.
The markets are also pricing in an increased likelihood of a U.S. Federal Reserve interest rate cut in September, following weaker-than-anticipated Consumer Price Index (CPI) and Producer Price Index (PPI) figures released earlier this week.
Technical Analysis: Gold Price Outlook
Gold’s daily chart shows bullish momentum solidified on Friday after closing above the critical resistance level of $3,377, which corresponds to the 23.6% Fibonacci retracement of the April rally.
The 14-day Relative Strength Index (RSI) remains robust near 62, comfortably above the midline, indicating further upside potential.
The next key resistance is positioned at the psychological $3,450 level. A break above this could put the all-time high of $3,500 within reach.
On the downside, immediate support lies at $3,400. Should this level fail to hold, the previous resistance-turned-support at $3,377 (the 23.6% Fibonacci level) is likely to provide a cushion.
A deeper correction could test the 21-day Simple Moving Average (SMA), currently around $3,325.
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