Gold Price Surges Above $3,400 Amid Escalating Middle East Conflict and Fed Rate Cut Bets

Gold Price Breaks $3,400 as Middle East Conflict Intensifies

Gold (XAU/USD) surged past $3,400 to reach a high of $3,425 during Friday's Asian trading session, marking a 1.15% daily gain and the metal’s highest level in over five months. The spike follows renewed geopolitical fears and growing expectations for a Federal Reserve interest rate cut.

Israel-Iran Tensions Boost Safe-Haven Demand

Tensions flared in the Middle East after Israeli airstrikes targeted Iranian nuclear infrastructure, including Natanz. Israel's Defense Minister Israel Katz confirmed a "preemptive strike" had occurred, while Prime Minister Benjamin Netanyahu warned the operations will continue "as long as necessary" to neutralize Iran’s nuclear ambitions.

📌 “The fear of nuclear escalation is real,” Netanyahu said, adding that failure to act could lead to a nuclear arms race across the region.

Investors are turning to gold as a safe haven, amid uncertainty about potential military retaliation from Iran.

Fed Rate Cut Bets Add Fuel to Gold Rally

Alongside geopolitical stress, the market is also responding to rising expectations of a Fed rate cut. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold, supporting prices.

Technical Outlook: Resistance Ahead

Analysts point out near-term resistance at $3,417 and $3,431, but many believe that a break to new all-time highs is inevitable if current conditions persist.

“Gold is higher again for the second straight day. A decisive move above $3,431 could open the door to $3,450+ in the coming sessions,” one trader noted.

📌 Related: How Geopolitics and Central Banks Move Gold

Conclusion

With both geopolitical instability and dovish monetary policy sentiment on the rise, gold may continue its upward momentum. Traders should closely monitor developments in the Middle East and upcoming U.S. economic indicators that could influence Fed policy decisions.

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