Gold Surges Over 0.50%, Reaches $3,300 Amid Geopolitical Tensions and US Fiscal Pressures

Gold Prices Surge Amid Rising Geopolitical Tensions and US Fiscal Concerns

Gold prices (XAU/USD) experienced a significant rally on Wednesday, breaking through a tight trading range to reach $3,309 per ounce. This surge was driven by escalating geopolitical tensions in the Middle East, specifically reports that Israel is considering an attack on Iran’s nuclear facilities.

On Tuesday, CNN reported that Israel was contemplating military action against Iran, which sparked concerns of a potential conflict in the region. Although US President Joe Biden managed to persuade Israel's Prime Minister Benjamin Netanyahu to reconsider, tensions remain high.

In addition to the geopolitical instability, gold also benefited from increased safe-haven demand driven by ongoing US fiscal challenges. President Donald Trump is facing mounting difficulties in securing support for his budget package in Congress, particularly regarding disagreements over the state and local tax (SALT) deduction. These domestic struggles have further fueled investor demand for gold, as it is traditionally viewed as a secure asset during times of uncertainty.

As a result, gold prices broke out of their narrow trading range, with investors seeking refuge in the precious metal amid both international and domestic pressures.