Gold Surges to New Highs as Geopolitical Tensions and Fed Policy Drive Prices – Goldman's Forecast Now at $2,900
Amid a volatile Middle East and shifting U.S. economic data, gold remains the top safe-haven asset with Goldman Sachs pushing its price target to $2,900. Can it surpass its all-time high as central banks keep buying? | That's TradingNEWS
Gold (XAU/USD) Sees Strong Rally Amid Geopolitical Tensions and Rate Cut Speculation
Geopolitical Factors Boost Demand for Gold
Gold (XAU/USD) has surged over 1% recently, driven primarily by escalating tensions in the Middle East. Iran's ballistic missile attacks on Israel have intensified geopolitical risks, triggering a flight to safe-haven assets like gold. Israel's Prime Minister Benjamin Netanyahu has promised retaliation, while Iran has warned of further destruction if provoked. As these tensions deepen, market participants are turning to gold as a hedge against uncertainty.
U.S. Economic Data Caps Gold's Gains
Despite the bullish trend in gold, gains have been somewhat limited by strong U.S. economic data. The Job Openings and Labor Turnover Survey (JOLTS) revealed that job openings in the U.S. unexpectedly rose to 8.04 million in August. This resilient labor market, alongside relatively hawkish comments from Federal Reserve Chairman Jerome Powell, has tempered expectations for aggressive rate cuts. The Fed is now expected to make two 25 bps rate cuts by year-end, lowering the chances of a 50 bps cut in November, which has helped strengthen the U.S. dollar, capping further gold price gains.
Goldman Sachs Raises Gold Forecast
Goldman Sachs has adjusted its price target for gold, raising it from $2,700 to $2,900 per ounce by early 2025. This optimistic outlook is underpinned by increased ETF flows into gold, expectations of further rate cuts by the Federal Reserve, and rising central bank purchases, particularly from countries like China. Investors view these factors as catalysts that will likely keep gold prices buoyant over the coming years.
Technical Analysis: Gold Eyes $2,700 Mark
From a technical perspective, the recent surge has reinforced gold's bullish trajectory. The price is currently testing the $2,670-$2,673 resistance area, with an all-time high of $2,685. Should gold break above the $2,700 mark, it could trigger fresh buying interest, pushing the price toward $2,730. On the downside, any correction below $2,623 could see the price retreat to the $2,600 psychological support level, with further downside risk to $2,585 if the selling pressure intensifies.
Iran-Israel Tensions Continue to Drive Safe-Haven Demand
With geopolitical risks showing no signs of abating, gold continues to attract safe-haven flows. Iran's Revolutionary Guard recently fired hypersonic missiles at Israeli targets, with Iranian officials stating that their actions are concluded unless provoked further. However, Israel's military actions in Lebanon and against Iran-backed Hezbollah could reignite fresh bouts of retaliation. If these conflicts continue or worsen, gold could break out of its current consolidation and move toward record highs.
U.S. Jobs Data and Fed Rate Cuts Remain Key for Gold's Next Move
Looking ahead, the upcoming U.S. ADP employment data and Nonfarm Payrolls (NFP) report will be crucial in shaping the direction of gold prices. The market is expecting private-sector job growth of 120K in September, which could influence the Federal Reserve's next moves. If the data disappoints and bolsters expectations of more aggressive rate cuts, gold could gain further ground as the U.S. dollar weakens.
Conclusion: Is Gold a Buy, Sell, or Hold?
Gold (XAU/USD) remains an attractive asset in today's uncertain environment. With the combination of geopolitical tensions, hawkish Fed commentary, and robust central bank purchases, the outlook for gold continues to be bullish. However, investors should be cautious of near-term volatility, particularly if U.S. economic data surprises to the upside.
As things stand, gold is poised for further gains, especially if it can break through key resistance levels. For those already holding positions, maintaining exposure appears prudent. For new investors, any pullback toward the $2,600 level could offer an opportunity to enter at a more favorable price point.
Gold continues to play its traditional role as a safe-haven asset, and with the potential for a full-blown conflict in the Middle East, combined with a shifting U.S. interest rate environment, the metal looks set to remain in focus for the foreseeable future.
