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Gold Holds Firm as Geopolitical Risks Offset Fed Rate Hike Concerns

By Saqib Iqbal1 min read

Gold prices were little changed on Monday as investors balanced rising geopolitical tensions in the Middle East against expectations that the U.S. Federal Reserve could keep interest rates higher for longer. Spot gold traded near $4,020 per ounce, while U.S. gold futures hovered around $4,023, reflecting cautious market sentiment. (Reuters)

The primary catalyst remains escalating tensions involving the United States and Iran, which have increased demand for traditional safe-haven assets. However, the bullish impact has been limited by stronger oil prices, which are fueling inflation expectations and reinforcing the possibility of another Federal Reserve rate hike later this year. Higher interest rates typically reduce the appeal of non-yielding assets such as gold. (Reuters)

From a technical perspective, gold is consolidating after failing to sustain gains above the $4,100–4,200 resistance zone. Immediate support is seen around $3,980, followed by $3,850, where buyers may attempt to regain control. A decisive break above $4,200 would likely confirm renewed bullish momentum and could open the door toward fresh all-time highs. Conversely, a close below $3,980 would increase the probability of a deeper corrective move. (The Wall Street Journal)

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For traders, the near-term outlook remains mixed. Geopolitical developments continue to provide underlying support, while expectations of tighter monetary policy cap upside momentum. This week's Federal Reserve commentary, Treasury yield movements, and headlines from the Middle East are expected to remain the dominant drivers of gold prices. Until a clear breakout occurs, analysts expect bullion to trade within a broad consolidation range while investors await the next major macroeconomic catalyst. (Reuters)

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