By George Pavel

Gold prices traded near record highs after surpassing the USD 3000 level, as rising geopolitical tensions in the Middle East fueled risk aversion. The end of the cease-fire saw a resurgence in hostilities and could drive investors toward safe-haven assets as they avoid volatility risks in other asset classes. Such conditions could help gold record new highs.

However, positive developments in Eastern Europe could limit gold’s gains although uncertainty on that front could play in the metal’s favor. Traders could continue to monitor the situation in the region and the impact of new developments on sentiment.

Meanwhile, today’s Federal Reserve interest decision could also favor the bullion’s short-term outlook. If Fed Chair Jerome Powell’s remarks signal a shift toward looser monetary policy, non-yielding assets like gold could become more appealing. Conversely, a more restrictive monetary policy could benefit the US Dollar, limiting gold’s upside potential.

Pavel is General Manager at Naga.com Middle East