Should You Buy Gold Now? Analysis of Price Trend, War Impact, Fed Policy
Gold is hovering near $3,420 per ounce, just below its all-time high set in April. Multiple fundamental forces are driving this:
- Fresh Iran-Israel strikes increased safe-haven demand.
- Weak inflation and job data increased expectations for a Fed rate cut by September.
- Trump's trade rhetoric is pushing investors toward hard assets.
- Ongoing move away from the USD strengthens gold's longer-term appeal.
Trading Pattern Analysis
Price Action Behavior (2025 YTD) 30% year-to-date rally, steady climb since January. Higher highs and higher lows pattern — clear bullish structure. Every pullback has found support above previous resistance zones (classic breakout-retest pattern). Friday saw a 1.4% jump, followed by 0.3% uptick in Asia today — showing momentum continuation.
Recent Support and Resistance
- Support area: $3,429 / $3,413 / $3,391
- Resistance area: $3,473 (very near record high)
Gold Price Fundamental Drivers
Iran-Israel escalation over the weekend, missile and drone attacks raised geopolitical risk sharply. Investors rotated out of US Treasuries and into gold - a classic flight-to-safety play. Likely to remain supportive unless clear de-escalation is seen.
Weak CPI and job data raised rate cut bets. Fed decision expected this week; market pricing in cuts from September. Lower interest rates reduce opportunity cost of holding gold (which yields nothing).
Tariff fears add another layer of global uncertainty. Investors are hedging policy risk by favoring physical commodities.
Gold Technical Outlook
Buy on dip to $3,413–$3,429 zone (strong support area). Use tight stop below $3,391. First target: $3,473, then new highs above $3,500 if escalation continues or Fed turns dovish.
Alternative Scenario (low probability)
If geopolitical tensions ease and Fed is unexpectedly hawkish, gold could drop toward $3,375–$3,350, where next support awaits.
Should You Buy Gold Now?
Gold is trading in a strong uptrend, supported by escalating war risk, dovish Fed expectations, and macro instability. All signs point to continued haven flows. The current pullback offers a potential buy-the-dip opportunity. As long as price stays above $3,391, bulls remain in control.
