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Gold attracts safe-haven demand following reports that Israel is considering strikes on Iran’s nuclear facilities.
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President Trump faces opposition from Republican lawmakers over his fiscal package in Congress.
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Having broken out of a narrow trading range, gold looks poised for further gains.
Gold (XAU/USD) edged higher on Wednesday, approaching $3,311 amid growing concerns over escalating tensions in the Middle East and uncertainty surrounding President Trump’s fiscal bill in Congress. Late Tuesday, CNN reported that Israel is considering strikes on nuclear sites in Iran. While former US President Joe Biden managed to sway Israel’s Prime Minister Benjamin Netanyahu, President Trump’s diplomatic efforts appear to be faltering, raising questions about his influence over Netanyahu.
Domestically, Trump is also facing challenges as his administration struggles to gain sufficient support in Congress for the proposed tax bill. Frustration mounted during talks on Capitol Hill, where lawmakers pushed back, demanding a significant increase in the cap on state and local tax (SALT) deductions.
Daily Market Digest: Gold Supported by Middle East Tensions and US Congressional Deadlock
- Gold’s safe-haven appeal received a boost following a CNN report suggesting that Israel may be considering a strike on Iranian nuclear facilities. However, it remains uncertain whether a final decision to launch the attack has been made. Markets will closely watch for confirmation from US or Israeli officials to gauge the potential impact.
- Meanwhile, in a recent phone call between US President Donald Trump and Russian President Vladimir Putin, the Vatican proposed hosting any peace talks related to the ongoing Russia-Ukraine conflict, signaling a possible diplomatic breakthrough.
- On the economic front, the Financial Times reported that US lawmakers are urging Northern Ireland to approve an American-owned gold mining project worth potentially billions of pounds to the local economy. Delays in the approval process risk deterring foreign investment in the region.
Gold Price Technical Analysis: Potential for Further Gains
Ongoing geopolitical tensions in the Middle East combined with gridlock in the US Congress have weighed on President Trump’s credibility and, more broadly, on confidence in the US Dollar and economy. As a result, gold continues to benefit from increased market uncertainty and could surge above $3,350 if Israel confirms its intentions to strike.
Key resistance levels to watch include the R1 resistance at $3,324, which corresponds with the May 12 high. The next hurdle, R2 resistance at $3,354, could pave the way for a climb toward $3,431, marking peaks from April 21 and May 6-7.
On the downside, solid support lies at the daily pivot point of $3,263, followed by a technical support level at $3,245, with $3,231 acting as the intraday S1 support zone in case of price decline.
Daily Chart: XAU/USD
