Gold Price Surges Toward $3,450 Amid Israel-Iran Conflict and Fed Rate Cut Bets

Gold Price (XAU/USD) Surges Near $3,450 as Geopolitical Tensions and Fed Expectations Rise

Monday – Asia: The price of gold (XAU/USD) surged to nearly $3,445 during the Monday Asian session, reaching a one-month high as investors seek refuge amid escalating geopolitical turmoil in the Middle East and growing speculation of a Federal Reserve rate cut.

Middle East Conflict Spurs Safe-Haven Demand

A broader regional conflict following Israel’s latest strikes on Iran has elevated global uncertainty, triggering strong safe-haven flows into gold. Iran has warned it will “act firmly against any adventurism,” amplifying fears of a wider conflict in the region.

Market Eyes September Fed Rate Cut

Market participants now price in an 80% probability of a Fed rate cut in September, according to rate futures. These expectations are lending additional support to gold, which tends to benefit from a lower interest rate environment due to reduced opportunity costs.

Strong US Data Overlooked

Despite the bullish momentum, investors largely brushed aside Friday’s positive US economic data. The University of Michigan Consumer Sentiment Index rose to 60.5 in June, up from 52.2 in May and exceeding expectations of 53.5.

"Gold remains resilient despite strong data, thanks to geopolitical shocks and dovish Fed expectations," analysts noted.

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