By Abdelaziz Albogdady Market Research & Fintech Strategy Manager at FXEM
Gold advanced for a second consecutive session as renewed geopolitical strains reinforced demand for safe-haven assets. Despite ongoing diplomatic efforts, tensions in both the Middle East and Eastern Europe have intensified, casting doubt on the viability of current peace talks. This persistent fragility continues to embed a geopolitical risk premium into global markets, underpinning bullion’s appeal. At the same time, demand for gold remains strong as central bank accumulation continues and ETF inflows return, even at elevated price levels. Thinner liquidity conditions, during the Lunar New Year holiday in China, may also amplify price swings.
However, further upside could be tempered by uncertainty surrounding US monetary policy. The latest Federal Reserve minutes revealed a divided committee, with some officials open to the possibility of a return to policy tightening if necessary, while others signalled readiness to ease if conditions deteriorate. Upcoming US inflation data, particularly Friday’s PCE release, will be pivotal. Evidence of continued disinflation could reinforce expectations of interest rate cuts, while sticky inflation may inject fresh volatility into the metal’s trajectory and fuel downside risks.