Following the US Q1 GDP numbers, which came in 1.6% lower than expected (2.5%), gold prices rose yesterday. Higher Treasury rates are supported by a sharp increase in Q1 inflation to 3.7%, which dampens prospects for an early reduction in Fed policy.

Despite a stronger US dollar and higher US Treasury rates, gold recovers from recent losses thanks to Chinese market demand. Gold prices got support around $2305 and prices have reversed and it is expected that prices will be consolidating between $2300-2350.

Gold prices got support around $2305 and prices have reversed and it is expected that prices will be consolidating between $2300-2350. While Silver has got strong support around $27 and an uptrend line extending from $22 to $30 on Daily charts.

As forecasted, gold prices have fallen 5.5% to $2310 (Rs 70500) now after touching a high of $2448 (~Rs 74000) in the first week of April and trading stable last week as Middle East tensions ease. Even Silver prices have fallen 10% to $27 (~Rs 80000) now after touching a high of $30 (~Rs 86000).

The financial markets are seeing a surge in risk aversion following the confirmation that Israeli rockets had attacked an Iranian target, hence intensifying geopolitical tensions in the Middle East.

The quest for a safe haven remains strong due to the growing geopolitical tensions in the Middle East. In retaliation for Iran’s attack on Israel, the US issues a warning regarding sanctions. The Fed’s “higher for longer” interest rate policy counteracts the demand for safe haven assets, but the price of gold is still rising.

Iran’s attack on Israel increased demand for safe havens, which in turn drove up the price of bullion, although significant increases were hampered by the strength of the dollar. Although it appears that most of the tension between Iran and Israel has been priced into gold prices, fresh friction or retaliation would likely drive prices higher.

As forecasted, gold has achieved the short-term target of $2400 (Rs 72500). Gold has achieved all the targets and is in the overbought zone. It seems gold prices can top out today and fall steeply next week.

As tensions between Israel and Hamas continue to rise, the price of gold rises beyond $2380. Strong demand for safe-haven assets amid escalating global tensions is balancing the negative effects of diminishing expectations that the Federal Reserve would switch to rate reduction in June, which is why the precious metal is still rising.

Given the ongoing geopolitical concerns, the gold price is expected to stabilize after making significant recent gains that sent it to an all-time high on Monday. The US dollar is supported by high bond rates, which also limit the increase in gold prices.

After Federal Reserve Chair Jerome Powell reaffirmed that recent data on job gains and higher-than-expected inflation do not significantly alter the broader picture of economic policy this year, gold prices shot to yet another new high today, reaching $2323.

Gold surges beyond $2300 (~Rs 69400), propelled by robust US data and concerns in the Middle East. Gold’s latest surge was supported by Israel’s attack on the Iranian embassy in Syria on April 1, even though this week saw a spike in US rates and a strengthening US dollar.