Gold prices rose at the opening of the Asian session on Monday, touching a multi-week high above $3,450 before reversing course and falling below Friday’s closing levels. The initial gains were driven by increased demand for haven assets following a further deterioration in the geopolitical landscape, as Israel and Iran exchanged waves of missile attacks. However, despite the serious escalation between the regional rivals, market reaction remained relatively muted. Equity futures posted gains in early Asian trading, with risk appetite quickly returning and offsetting bullion’s early advance. Against this backdrop, traders’ attention will remain focused on the ongoing trade negotiations, which continue to play a key role in shaping the global economic outlook.
Additionally, markets will closely watch this week’s Federal Reserve meeting and rate decision. Although interest rates are widely expected to remain unchanged, investors will pay close attention to the post-announcement statement and Q&A session for signals on the Fed’s near-term policy stance. Any shift in expectations — which currently point to a 25 basis point cut in September, followed by a similar move before year-end — could influence the performance of the US dollar and, by extension, impact gold prices due to the inverse correlation between the two assets.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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