By Abdelaziz Albogdady, Market Research & Fintech Strategy Manager at FXEM
Gold stabilized to a certain extent on Tuesday following its latest gains. Geopolitical dynamics remain a core pillar of support. Escalating tensions in the Middle East, intensified by statements from President Trump indicating continued military pressure and warnings from Iran regarding potential disruption of the Strait of Hormuz, have reinforced concerns. Elevated tensions in Eastern Europe further sustain the embedded geopolitical risk premium.
Institutional demand is also likely to remain firm. Persistent central bank accumulation and the prospect of renewed ETF inflows could continue to underpin the precious metal.
However, the metal could face some headwinds. In addition to a stronger US dollar, rising oil prices have revived inflation concerns in the US, contributing to higher Treasury yields. Markets are reassessing the pace of Federal Reserve easing, with expectations for multiple rate cuts becoming less certain. This recalibration may cap near-term gains, though the broader bias remains upward while geopolitical uncertainty endures.
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