Geopolitics and Rates: Gold's Wild Ride Continues

Gold pared some of its gains due to profit booking. It hit an high   of $3392 and is currently trading around $3362.58.

Rising geopolitical risks from an ongoing conflict between Russia and Ukraine, marked by more drone attacks and aerial attacks, together with revived trade tensions between the US and China, driven by President Trump's tariff hikes, have caused gold prices to skyrocket in early June 2025. Reflecting investors' growing demand for safe-haven assets in light of worldwide economic uncertainty and a falling US dollar, the spike in prices saw gold rise over 2% to $3,353.69 an ounce, confirming gold as a major hedge during times of crisis. Although experts forecast continuing volatility, the underlying bias for gold is favorable because of constant safe-haven demand and continuing geopolitical and economic uncertainties.

Shifting Rate Hike Expectations

According to the CME Fed Watch tool, the chances of a rate pause in the June 18th, 2025 meeting have decreased to 98.70% from 97.80% a week ago.

Technical Analysis: Key Levels and Trading Strategy
 
Gold prices are holding above the short-term moving average 34 EMA and above 55 EMA and above the long-term moving averages (200 EMA) on the 4-hour chart. Immediate support is at $3350 and a break below this level will drag the yellow metal to $3335/$3300/$3270/$3245/$3230/$3200/$3165/$3135/$3100/$3000. The near-term resistance is at $3400 with potential price targets at $3415/$3465/$3500.

It is good to buy on dips around $3328-30 with a stop-loss at $3300 for a target price of $3385.