Forecasting Gold Prices: XAU/USD Maintains Position Below $2,400 Following Fed’s Hawkish Remarks, Focus Turns to Geopolitical Risks

On Monday, during the early trading hours in Asia, the price of gold, shown as XAU/USD, was around $2,385. At this price, some people were selling their gold. This happened because officials from the Federal Reserve, the main bank in the United States, made comments that hinted they might raise interest rates. When interest rates go up, it can make gold less attractive to buy because it doesn’t earn interest like other investments. However, tensions in the Middle East, like between countries such as Israel and Iran, are increasing. During uncertain times, people often turn to safe-haven assets like gold, seeing it as a secure place for their money. So, despite the Fed’s comments, worries about conflicts in the Middle East could still push gold prices up.

It’s becoming more likely that the US Federal Reserve, which is like the main bank of the country, won’t change interest rates this year. One of the top officials from the New York Fed, named John Williams, said recently that he doesn’t think they’ll raise rates again soon. But if the data, like information about the economy, show that they should raise rates to reach their goals, then they’ll probably do it. Another Fed official from Chicago, named Austan Goolsbee, mentioned that progress in controlling inflation has slowed down, so the Fed’s current plan to keep things a bit tight with money is probably a good idea. Someone else from the Atlanta Fed, called Raphael Bostic, said they won’t likely lower rates until the end of the year. All this talk about maybe raising interest rates more could make investments that don’t pay interest, like metals, seem less attractive, which could lower the price of gold.

Lately, there’s been more tension between Israel and Iran. Earlier this month, there was a suspected attack by Israel on an Iranian building in Syria. Then, Iran responded by attacking Israel on April 13. But it seems like both sides are pulling back a bit from the possibility of a big fight. Lawmakers in the US recently agreed to give more military aid to Israel, which might help calm things down. Still, people who invest money are keeping a close eye on what’s happening in the Middle East. If tensions keep going up, it could make investments like gold, which are seen as safe during uncertain times, more valuable.

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