Searching for direction in gold prices: Fed and geopolitical risks are effective

The search for direction in gold prices continues. While the Fed's interest rate policy, the volatility in oil prices and geopolitical developments in West Asia are in the focus of investors, gold prices are stuck between important support and resistance levels. Markets are following the messages from the Fed and global developments for a new move.

WHY ARE GOLD PRICES NOT RISING?

While gold remained under pressure again after the recent rise, there was no clear direction in prices. While the decline in oil prices alleviated inflation concerns to some extent, the decrease in pressure on US Treasury bond yields also limited some effects on gold.

Markets are still eyeing the Fed's monetary policy. While the expectation that interest rates will remain at high levels after the Central Bank's last interest rate increase has become stronger, this puts pressure on gold, which does not provide interest income.

While the possibility of investors turning to high-yielding assets increases in a high interest rate environment, the attractiveness of gold may decrease. For this reason, the statements to be made by Fed officials in the coming period are important for the direction of gold prices.

OIL AND IRAN DEVELOPMENTS ARE ALSO FOLLOWED

Another important topic that can determine the direction of gold is the oil market. Uncertainties regarding oil supply and developments in West Asia can affect both energy prices and inflation expectations.

Within the scope of the United Nations General Assembly, developments between the USA and Iran are also closely monitored. While US President Donald Trump stated that he was open to meeting with Iranian President Massoud Pezeshkian, no official meeting has been confirmed so far.

A diplomatic breakthrough between the US and Iran could reduce concerns about energy supply in the region. On the other hand, the escalation of tension may raise new questions about oil supply and inflation.

Another development followed by the markets is the expected meeting between US President Donald Trump and Chinese President Xi Jinping. The meeting, where trade, artificial intelligence and geopolitical topics are expected to be on the agenda, may also affect gold prices through the dollar and US bond yields.

CRITICAL SUPPORT AND RESISTANCE LEVELS BELOW

In the graphic view of gold, it can be seen that prices have been moving between two important levels for a while. On the upside, there is a bearish resistance line starting from previous highs. While selling pressure appears in the rises towards this region, it becomes difficult for the price to maintain its upward movement.

On the downside, there is bullish support passing through previous lows. After testing the level of approximately $4,000 in its last retreat, gold recovered and rose to $4,650. It experienced renewed sales in this region.

Currently moving at around $4,300, gold is looking for direction between these two limits. If the price exceeds the resistance above or falls below the support below, it may lead to a decrease in uncertainty in the market and a more significant movement.

WHAT DEVELOPMENTS WILL DETERMINE THE DIRECTION OF GOLD?

In the coming period, the Fed's messages regarding interest policy, movements in oil prices and geopolitical developments will be the main agenda items of the gold market.

While the expectation of high interest rates puts pressure on gold, an increase in geopolitical risks may provide support to prices. For this reason, investors will keep their eyes on both the statements from central banks and the developments in global markets.