XAU – Israel-Iran conflict further escalates, gold continues to see safe-haven support

Iran and Israel continued to launch air strikes against each other last week, causing financial markets to fluctuate last week; and U.S. President Trump did not give a clear statement on whether the United States would join Israel in bombing Iran's nuclear bases, which once caused the overall gold and foreign exchange market to be in a stalemate before the weekend. However, just on Sunday, Trump announced an attack on Iran's nuclear facilities, and the market's risk aversion may rise significantly in the short term. In particular, we should pay attention to Iran's potential retaliatory actions, which may make safe-haven assets such as gold, the U.S. dollar, and US bonds popular. Due to the uncertainty brought to the market by the United States' ever-changing and unclear trade policies, the status of the US dollar as a traditional safe-haven currency has lost some of its luster in recent months, but under the influence of the external risk event of the escalation of the Middle East conflict, we should also be careful that the U.S. dollar may regain support. After that, the more important economic data this week will focus on the U.S. first quarter GDP and May durable goods orders data released on Thursday; however the most critical focus should be on the U.S. May PCE price index released on Friday.

Affected by geopolitical risks, central bank demand and low interest rates, gold opened at $3,451 at the beginning of last week and then moved down to $3,340, with an adjustment in the trend. If we look at the weekly chart, there is a chance of divergence, and the key is the nine-week average of $3,515. If the geopolitical risk is digested and then lost, there is a chance to drop to the 25-week average of $3,063. If we narrow the range and look at the consolidation pattern from April to now, it can be said to be a small triangle. The mixed support area of ​​the medium- and short-term averages is still the 25-day average of $3,339 and the 50-day average of $3,317. If it loses for more than 3 days, the adjustment will deepen and test $3,140 downward. If we look at the closing price line chart, gold did not close above $3,430 after reaching a new high, so this position can be regarded as the closing price dividing line. Another resistance level is $3446. If it can break through, the adjustment is complete. The next stop can challenge higher levels such as $3600, because jumping from low to high will have more room to break higher. Note that if it is just a quick rise, it will fall quickly, so the longer the gold price can adjust and consolidate, the stronger the upward force will be. On the other hand, gold against silver (gold price/silver price) is currently struggling between $90.3 and $94.9. It is estimated that if one side breaks through, gold and silver will reappear in divergent trends. This week, it is estimated that the trend of gold will fluctuate between $3312 and $3413. The upper resistance is $3456 and $3492, and the lower support is 3364, $3348 and $3312. The range on Monday is estimated to be between $3351 and $3413. Note that Wednesday (25th) is the last trading day of COMEX gold options.

London Gold June 23-27 Forecasted range:
Resistance 3381 – 3402 – 3423 - 3456 – 3492
Support 3364 – 3348 – 3329 - 3313 – 3292

London Gold June 23
Forecasted Early Range: 3362 – 3385
Resistance 3396 – 3413 – 3431
Support 3351 – 3339 – 3328

SPDR Gold Trust gold holdings:
June 9 – 936.22 tons
June 10 – 935.91 tons
June 11 – 934.19 tons
June 12 – 937.91 tons
June 13 – 940.49 tons
June 16 – 941.93 tons
June 17 – 945.94 tons
June 18 – 947.37 tons
June 19 – 947.37 tons
June 20 – 950.24 tons

20/6 AM London Gold Fix: $3355.15
20/6 PM London Gold Fix: $3368.25 

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