GOLD REMAINS CLOSE TO RECORD HIGH AMID FEARS OF FULL-OUT WAR IN MIDDLE EAST
- Gold price attracted some haven flows on Tuesday amid rising tensions in the Middle East.
- Reduced bets for aggressive Fed rate cuts and stronger USD capped gains for the XAU/USD.
- Traders now look to the US ADP report for a fresh impetus ahead of the US NFP on Friday.
Gold price (XAU/USD) rallied over 1% on Tuesday and reversed its losses registered over the past two days amid escalating geopolitical tensions in the Middle East. Iran fired ballistic missiles at Israel, raising the risk of a full-blown war in the region and boosting demand for the traditional safe-haven precious metal. That said, diminishing odds for a more aggressive policy easing by the Federal Reserve (Fed) hold back bulls from placing aggressive bets around the non-yielding commodity.
Adding to this, some follow-through US Dollar (USD) buying, bolstered by data showing a resilient US labor market, further contributed to capping gains for the Gold price. Nevertheless, the XAU/USD remains within striking distance of the all-time peak touched last week and the fundamental backdrop favors bulls. Investors now look to the release of the US ADP report on private-sector employment for some impetus, though the focus remains on the Nonfarm Payrolls report on Friday.
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