Gold Prices Rose As Geopolitical Tensions In The Middle East Escalated.

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Gold Prices Rose As Geopolitical Tensions In The Middle East Escalated.

Gold prices experienced a marginal increase of 0.03% yesterday, closing at 61985, fueled by persistent concerns over the potential escalation of military actions in the Middle East and uncertainties surrounding the global economic outlook. This geopolitical tension has acted as a support factor for gold , a traditional safe-haven asset. Additionally, a strong U.S. economy and resistance from central bank officials have prompted some investors to reconsider their expectations for the Federal Reserve's rate-cut timeline. 

Market sentiment, as reflected in the CME's FedWatch Tool, suggests that investors anticipate the U.S. central bank to maintain interest rates during its policy meeting on January 30-31. The Indian government's decision to raise the import duty on gold and silver findings, along with precious metal coins, to 15% from January 22, has impacted the domestic market. In contrast, gold demand has seen an uptick in China and Hong Kong ahead of Lunar New Year celebrations.  

From a technical standpoint, the market is currently experiencing short covering, with a 14.34% drop in open interest to settle at 5031. Gold is finding support at 61800, and a breach below this level could lead to a test of 61620. On the upside, resistance is expected at 62210, and a move beyond this level may see prices testing 62440. This technical overview suggests a delicate balance in the gold market, with key support and resistance levels influencing future price movements. Traders and investors should monitor these levels closely for potential signals of market direction.

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