Towards the end of the week, the gold price once again enters rally mode. The escalation in the conflict between Israel and Iran led the yellow metal to its highest level in just over a month. Increasing expectations for the Fed to cut interest rates also contributed to the rise, which reached well above the $3,400 per ounce mark.
The trigger for the recent sharp increase in gold price was the news that Israel’s air force is conducting extensive attacks on Iran. The Israeli government justifies this step, with President Benjamin Netanyahu stating that the attacks will “last as long as necessary”, citing the threat posed to Israel by Iran’s nuclear program.
Economic Data from the US also Drives Gold Price Higher
The precious metal received further support already on Thursday, when new data showed that consumer prices in the US rose only slightly in May. This suggests that the effects of US President Trump’s tariff policy are yet to be fully felt in the United States economy.
Following the latest economic data from the US, markets now estimate that the chance of an interest rate cut by the US Federal Reserve is at 80%, with the next rate move possibly following in October.
