Gold retreats slightly after reaching two-month peak as Israel-Iran tensions intensify

Gold (XAU/USD) is seeing a modest retreat during the European session after touching a two-month high of $3,452.72 in early Asian trading on Monday.

Escalating geopolitical tensions—particularly the intensifying conflict between Israel and Iran—have bolstered demand for Gold as a safe-haven asset. Despite this support, XAU/USD has pulled back slightly, though it remains above the $3,400 mark at the time of writing.

Key factors influencing Gold prices include heightened safe-haven demand, fluctuations in US 10-year Treasury yields, and profit-taking at elevated price levels.

The Israel-Iran conflict has now entered its fourth day with no signs of de-escalation. Over the weekend, fighting intensified, prompting international appeals for calm. The United Nations, Saudi Arabia, and the United States have all urged restraint and called for a peaceful resolution.

Daily Market Movers Digest: Gold Holds Firm Amid Escalating Israel-Iran Conflict

• Gold (XAU/USD) remains well-supported as geopolitical risks intensify following Israel’s recent military operation against Iran. The conflict, now in its fourth day, continues to fuel safe-haven demand.
• Israel launched “Operation Rising Lion” on Thursday evening, targeting Iranian military and nuclear facilities. The strikes have resulted in the deaths of Iranian military officials, scientists, and civilians. Iran’s Health Ministry has confirmed a death toll of 224, while Israeli casualties have reached 24, according to CNN.
• The International Atomic Energy Agency (IAEA) reported significant damage to key Iranian nuclear sites, including the Natanz enrichment facility and the Isfahan Nuclear Technology Center, where uranium metal production facilities were struck.
• As both nations expand the scope of their attacks, the international community is urging de-escalation.
• The United States will conduct a 20-year bond auction at 17:00 GMT during the American session. This comes amid rising concerns over US debt sustainability. The yield from the previous auction stood at 5.047%, the highest since October 2023. Rising yields tend to strengthen the US Dollar, as they attract foreign investment—potentially capping Gold’s upward momentum.
• The Federal Reserve is set to announce its interest rate decision on Wednesday, with markets widely anticipating no change, maintaining the target range of 4.25%–4.50%. Investors will closely watch the FOMC statement, Chair Jerome Powell’s press conference, and the updated Summary of Economic Projections (the “dot plot”) for guidance on future rate policy and the economic outlook.

Gold Technical Analysis: XAU/USD Pulls Back From $3,450 Peak

Gold prices are trading near $3,415 at the time of writing, retreating modestly from an earlier two-month high of $3,452 reached during Monday’s Asian session. Despite the pullback, the 4-hour chart suggests downside moves have been relatively contained.

Resistance Levels:

Immediate resistance is seen at $3,439, the monthly high from May.

Further resistance lies at $3,446, tested on Friday.

A break above $3,452 could pave the way for a retest of the $3,500 all-time high set in April.

Support Levels:

Initial support is at the psychological level of $3,400, which coincides with the 20-period Simple Moving Average (SMA) on the 4-hour chart.

A deeper pullback may find support at $3,372, aligning with the 23.6% Fibonacci retracement of the April rally.

Overall, XAU/USD remains in a bullish posture as geopolitical uncertainty and market caution ahead of the Fed decision continue to lend support to Gold.

Gold (XAU/USD) 4-hour chart