Gold reached a one-month high last week as the crisis between Israel and Iran worsened. The increased geopolitical tensions in the Middle East were expected to push gold prices closer to a new all-time high.
Gold is trading at $3,414 per ounce on Monday, staying near all-time highs touched in April, as rising Middle East tensions pushed investors into safe-haven assets.
But, gold prices on Monday are subdued and lower by 0.5% than Friday’s close. Here’s a probable reason why gold prices on Monday are still flat.
Last week, after the Middle East tensions erupted, the equity market crashed, and oil prices surged, but US financial markets held ground. The US Bond yields and the US dollar were much unaffected, which could have led to gold prices remaining unchanged on Monday.
Israel and Iran launched further attacks over the weekend, raising concerns that the intensifying confrontation could spark a larger regional conflict. Investors are preparing for crucial central bank meetings this week, with a special focus on the US Federal Reserve.
Safe-haven demand has pushed gold prices to their highest level since April’s record high of $3,500. Now, the Gold price is less than 2% away from crossing the all-time level recorded in April.
Gold is up 47% over the last 1-year. By and large, the surge in gold prices in 2025 has been spurred by President Donald Trump’s aggressive tariff agenda, which threatens global economic development. And, the recent spike in geopolitical risk has added to its momentum.
Central banks’ efforts to diversify away from the dollar have contributed significantly to the over 30% spike in gold prices by 2025.
“China and Russia are the two central banks that are still hoarding physical gold, and the Dollar Index’s stabilization below 105 provides another technical tailwind,” says Dr. Renisha Chainani, Head – Research at Augmont.
On Wednesday, the US Fed is widely expected to hold interest rates unchanged. Investors will be looking for any forward signal on the timing and scope of future rate decreases from Powell’s speech and the dot plot projections.
Recent economic data, particularly last week’s softer-than-expected inflation report, has fueled speculation that the central bank would begin relaxing policy as early as September. Investors are also waiting for more information on US President Donald Trump’s tariff intentions since he will impose tariff rates on trading partners in the coming weeks.
Gold price today in India is still below Rs 1 lakh. The spot gold price on MCX closed at Rs 98,732 (Ahmedabad) on Friday, June 13. In the futures market, gold contracts 05 August 2025 touched an intra-day high of Rs 1,01,078 on Monday.
“Technically speaking, gold prices are above the $3410 (~Rs 99000) resistance zone, which corresponds to the upper bound of the rising wedge formation. The April ATH of $3500 (~Rs 101,500) may reappear if a move above this zone opens the way for last week’s high around the psychological level of $3468 (~Rs 100,700). A violation of this zone might open the door for the next significant psychological milestone of $3270 (~Rs 92500) if bearish momentum is to acquire traction,” says Dr. Chainani.