Gold prices (XAU/USD) showed significant strength in Wednesday’s American session, driven by investor focus on the Federal Reserve’s impending monetary policy announcement. The precious metal surged to nearly $2,420, boosted by its safe-haven status amidst escalating Middle East tensions. Historically, geopolitical unrest has led investors to seek refuge in precious metals.
Concerns of a broader conflict between Israel and Iran intensified following reports of Hamas leader Ismail Haniyeh’s death in an Israeli airstrike on Tehran. This development has sparked fears of an Iranian retaliation, greatly diminishing prospects for a ceasefire.
Concurrently, the US Dollar (USD) continued its decline, impacted by disappointing US ADP Employment data. The report revealed that 122,000 employees were hired in the private sector in July, falling short of the expected 150,000 and the previous month’s upwardly revised figure of 155,000. This indicates a weakening labor market. The US Dollar Index (DXY), which measures the Greenback against six major currencies, dropped below the critical support level of 104.00. Additionally, 10-year US Treasury yields fell to a new four-month low of 4.11%.
