Gold prices have trended downward since the start of the week, currently hovering around $3,385 per troy ounce. This report aims to explore the fundamental factors influencing the precious metal’s price movements and conclude with a technical analysis of gold’s daily chart.
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Ongoing Israel-Iran Conflict and Its Impact
The conflict between Israel and Iran has escalated, marking its fifth day with new attacks reported today. The exchange of missiles between Tehran and Tel Aviv suggests a battle for air dominance rather than a conventional ground war. Tensions spiked last week following remarks by U.S. President Trump about preventing Iran’s nuclear ambitions, stating, “It would be better to resolve this without conflict, without loss of life—that’s the ideal approach.” In response, Iran’s Defense Minister declared, “Should conflict be forced upon us, all U.S. bases in the region are within our range, and we will not hesitate to strike them in host nations.”
This rhetoric appears to have given Israel the pretext to launch airstrikes since Friday, targeting high-ranking Iranian officials, including the wartime chief of staff and his recently appointed successor, as well as nuclear scientists and military leaders. These strikes aim to disrupt Iran’s military leadership and nuclear program. Iran has retaliated with approximately 370 ballistic missiles and a wave of drones aimed at Israel.
The critical question now is whether the U.S. will engage militarily and whether Israel’s objectives extend beyond neutralizing Iran’s nuclear capabilities to pursuing regime change. Such developments could further destabilize the region, raising concerns about shifts in power dynamics. Hostilities continued today with Israel launching fresh strikes, and Iran may respond later. As a safe-haven asset, gold may be benefiting from these heightened tensions. However, reports suggest President Trump left a G7 meeting to return to Washington, prompting French President Macron to claim it was to negotiate a ceasefire between Israel and Iran.
Trump refuted this, stating, “I have not contacted Iran for any ‘peace talks.’ This is completely fabricated, fake news! If they want to negotiate, they know where to find me. They should have accepted the deal on the table—it would have saved many lives!” This denial casts doubt on an imminent ceasefire. Thus, the ongoing Israel-Iran conflict may continue to support gold prices until a resolution, whether through regime change or diplomatic agreement, is reached.
Federal Reserve Interest Rate Decision This Week
The Federal Reserve’s next interest rate decision is scheduled for Wednesday, June 18. Market expectations, as indicated by Fed Funds Futures, point to a 98.8% likelihood of rates remaining unchanged. As a result, focus will likely shift to the Fed’s accompanying statement and Chair Powell’s press conference. A signal that rates will stay steady for an extended period could bolster the U.S. dollar, potentially pressuring gold prices due to their inverse correlation.
Conversely, any dovish hints could weaken the dollar and support gold. Given uncertainties surrounding U.S. trade policies and the volatile Middle East geopolitical landscape, we expect Fed officials to avoid committing to a specific policy path, as these factors cloud the economic outlook.
