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Rising Gold Prices Amid Geopolitical Tensions

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Gold prices are on the rise in early trading as geopolitical tensions in the Middle East continue to escalate. Investors seeking safe-haven assets are turning to the precious metal, and one analyst predicts that gold could experience a significant surge.

The price of gold has shown a substantial recovery since the end of last year, with a 6.46% increase over the past three months. The ongoing tensions in the Red Sea region have further strengthened this upward trend.

In a recent attack that disrupted global shipping amidst Israel’s conflict with Hamas in the Gaza Strip, Houthi rebels in Yemen fired an anti-ship cruise missile towards an American destroyer in the Red Sea on Sunday. Fortunately, US officials reported that the missile was successfully intercepted by one of their jet fighters.

While the conflict in the region is driving investors towards safe-haven assets like gold, there are other indicators suggesting that the precious metal may experience a bullish breakout. Oanda’s senior market analyst, Kelvin Wong, has been closely studying charts to identify these trends.

According to Wong, gold recently underwent a V-shaped bullish reversal in the latter half of last week, finding support at the lower boundary of its medium-term ascending channel. This channel has been in place since early October. Wong further explains that a “bullish momentum condition” has been signaled by the daily relative strength index’s momentum indicator.

Furthermore, gold has surpassed the upper boundary of a previous minor descending channel that had been established since late December. The 20-day moving average, based on the one-hour chart, also confirmed this upward movement. Wong identifies the next resistance level to watch as $2,090 per ounce.

As of early Monday, spot gold was trading up 0.29% at $2,057 per ounce.

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