Gold Falls As Investors Sell To Cover Losses Amid Middle East Tensions

Published 20-06-2025, 11:09 am
Updated 20-06-2025, 11:15 am
© Reuters.  Gold Falls As Investors Sell To Cover Losses Amid Middle East Tensions

Kedia Advisory - Gold prices declined by 0.21% to settle at 99,329 as investors liquidated positions to cover losses in other asset classes amid rising geopolitical tensions in the Middle East. The ongoing Israel-Iran conflict entered its seventh day, with Israel reportedly targeting over 20 strategic sites in and around Tehran, including nuclear and missile facilities. The potential for U.S. involvement in these strikes has raised fears of a wider regional war, which typically supports safe-haven assets like gold. However, profit-taking and broader market sell-offs weighed on bullion prices. Adding to the cautious sentiment, the U.S. Federal Reserve kept interest rates unchanged but indicated the possibility of two rate cuts later this year.

 This dovish tilt came despite persistent inflation and slowing economic growth, and followed public criticism from President Trump urging more aggressive easing. According to a recent World Gold Council survey, 95% of central banks expect global gold reserves to increase in the coming year, with 43% planning to raise their own holdings. Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) maintained bullish long-term forecasts, projecting gold to touch $4,000/oz by mid-2026. However, physical demand in Asia weakened due to record-high prices, with Indian dealers offering discounts of up to $63/oz to entice buyers. 

Technically, the market is undergoing long liquidation, with open interest dropping 2.33% to 14,601. Immediate support is seen at 98,815, with further downside toward 98,300. Resistance is at 99,705, and a breakout could push prices to 100,080. 

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