On Tuesday, gold prices advanced for a second consecutive session. In fact, they’re on the verge of breaking through the critically important $3,400 barrier per troy ounce. The value of gold has surged in recent months, a byproduct of soaring geopolitical uncertainties. As a result, investors have rushed to safe-haven assets. Heightened geopolitical concerns in the Middle East have further added to this trend, bolstering gold’s attractiveness to wary investors.
The ongoing war in Ukraine and current geopolitical climate only magnify that uncertainty. Therefore, untold millions of Americans are looking at gold to find a truly safe, smart investment. With rising global tensions, gold has proven to be remarkably steady — even in the most precarious market conditions. The persistent demand for gold further highlights its position as a safe-haven asset, especially amidst global chaos.
In the currency markets, GBP and EUR were the biggest stories Tuesday. The GBP/USD currency pair continued its bullish run, reclaiming the crucial resistance level at 1.3400 at intraday highs. This increase occurs with the umbrella of ongoing USD selling pressure, which helped enable the GBP to strengthen against the U.S. dollar.
In the same vein, the EUR/USD resumed its trend higher but hit a roof at 1.1350. Analysts expect EUR/USD prices to remain within a range of 150 pips either side of 1.1300. Now all eyes are on the next Federal Open Market Committee (FOMC) meeting. Until the monetary policy direction becomes clear, especially with the all-important Chinese monetary policy, markets will probably remain in a tight trading range in the near term.
Now, as the market digests all of these news, gold’s technical posture is strong. Investors have their eyes firmly placed on worldwide geopolitical flare-ups and economic data points that may sway the fate of precious metals and currency values. Lingering uncertainties in the Middle East, Europe, and even here at home help gold retain its shine as a safe haven. At the same time, currency fluctuations remain subject to the vagaries of larger economic trends.