The USDT accountprecious metal market witnessed significant upward momentum as XAU/USD breached the $3,400 threshold during Friday's Asian session, marking its strongest performance in nearly half a year. This rally stems from two primary catalysts: intensifying geopolitical instability in the Middle East region and evolving market expectations regarding the Federal Reserve's monetary policy trajectory.
Recent developments in the Middle East have significantly influenced market sentiment. Late Thursday, Israeli Defense Minister Israel Katz confirmed defensive operations against Iranian targets, subsequently declaring a nationwide state of emergency. Prime Minister Benjamin Netanyahu reinforced this position in early Friday remarks, emphasizing Israel's strategic objective to neutralize nuclear proliferation risks in the region. These developments have created substantial safe-haven demand among institutional investors and central banks alike.
Market analysts observe that the current technical landscape suggests potential for further upside. "The $3,400 level has transformed from resistance to support," noted Peter Grant of Zanier Metals. "While intermediate resistance exists near $3,430, the broader technical configuration indicates this rally may have additional room to run, particularly given the current macroeconomic backdrop."
Beyond geopolitical factors, shifting expectations regarding Federal Reserve policy continue to support precious metals. Recent economic data has prompted market participants to increase bets on potential rate cuts later this year, reducing the opportunity cost of holding non-yielding assets like gold. This dual catalyst environment - combining geopolitical uncertainty with monetary policy expectations - creates a particularly supportive environment for gold's continued appreciation.
