Gold (XAU) Daily Forecast: Middle East Tensions Lift Prices, Testing $2,410

However, expectations of a 50-basis-point Federal Reserve rate cut in September and ongoing geopolitical tensions are providing some support to the metal, limiting its losses.

US Economic Data and Fed Rate Cuts: Implications for Gold Prices

Despite expectations for Federal Reserve interest rate cuts, the US dollar gained traction due to rising Treasury yields, limiting gold’s gains. Recent data showing weaker manufacturing and job growth has heightened recession fears, causing Treasury yields to drop to their lowest since mid-2023.

Traders anticipate a 50-basis-point Fed rate cut in September. However, San Francisco Fed President Mary Daly stated that the job market slowdown is not alarming and that interest rates will balance employment and price stability.

These developments have pressured gold prices, as a strong dollar and rising yields limit gains despite expected rate cuts.

Middle East Tensions Bolster Gold Prices

Ongoing Middle East conflicts are likely to support gold prices. Iran, Hamas, and Hezbollah have vowed retaliation against Israel following the assassination of Hamas leader Ismail Haniyeh in Tehran.

This tension enhances gold’s appeal as a safe-haven asset, offering support despite pressure from a stronger US dollar and rising Treasury yields.

Short-Term Forecast