Gold prices surge amid rising economic and geopolitical concerns

Gold has seen a notable rally this week, driven by a combination of disappointing U.S. economic data, a dovish Federal Reserve stance and rising geopolitical tensions, according to a report by Ernest Hoffman for Kitco News. Kitco reported that despite Friday’s sharp flash crash, the precious metal has rebounded, reflecting strong trader sentiment.

Source: TradingView

Kitco noted that gold started the week around $2,400 an ounce and has fluctuated between $2,375 and $2,400. Kitco noted that weaker-than-expected U.S. manufacturing data on Tuesday fueled expectations of a dovish Fed policy, pushing gold prices through resistance levels. By Wednesday, Kitco said, spot gold had reached a new weekly high near $2,430 an ounce ahead of the Fed’s rate announcement. Following the Fed’s reaffirmation of its dovish outlook and weaker U.S. employment data, gold jumped to $2,457.86, maintaining its elevated range for the week, Kitco said.

Geopolitical tensions, particularly in the Middle East, have further fueled demand for gold as a safe haven asset. Kitco explained that reports of escalating conflicts, including Israeli missile strikes on Iran and Lebanon, have heightened market anxiety and pushed investors into gold. These geopolitical events, coupled with economic uncertainty, have helped increase gold’s appeal, Kitco added.

Analysts and traders surveyed by Kitco are overwhelmingly bullish on gold in the coming week. Kitco cites Adrian Day of Adrian Day Asset Management as expecting gold to break past highs due to a weakening U.S. economy and a potential Fed rate cut. Mark Chandler of Bannockburn Global Forex, quoted by Kitco, expects a quieter week but sees potential for gold to test psychological resistance levels at $2,500. Similarly, Kitco reported that Bob Haberkorn of RJO Futures views the recent sell-off as an overreaction, suggesting a buying opportunity as geopolitical risks remain.

Mike McGlone, senior commodities strategist at Bloomberg Intelligence, currently appears to be bearish on U.S. stocks and Bitcoin and bullish on gold:

At the time of writing, the latest price of Bitcoin was $58,449, down 14% over the past week.

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