{"id":89212,"date":"2024-08-06T17:12:22","date_gmt":"2024-08-06T14:12:22","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=89212"},"modified":"2024-08-06T17:12:23","modified_gmt":"2024-08-06T14:12:23","slug":"gold-outlook-geopolitical-tensions-and-recession-worries","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/ko\/gold-outlook-geopolitical-tensions-and-recession-worries\/","title":{"rendered":"Gold Outlook: Geopolitical tensions and recession worries"},"content":{"rendered":"

Gold\u2019s price moved lower since the beginning of the week<\/a>. Today we are to discuss the fundamental challenges laid ahead for the precious metal, the Israel-Iran tensions, the recent movement of US Yields, as well as the recent recession worries surrounding the US economy. Finally, we will be concluding this report with a technical analysis of gold\u2019s daily chart.<\/p>\n\n\n\n

Israel-Iran tensions take the spotlight once again<\/strong><\/strong><\/h2>\n\n\n\n

Tensions between Israel and Iran<\/strong> have taken the spotlight once again, with the two nations now seemingly preparing for a full-scale war in the region. That being said, we should note that this is the second time this year that we have seen the two nations at blows with one another.<\/p>\n\n\n\n

Nonetheless, the most recent event which has brought the two nations to the brink of war, was the assassination of Hamas leader Haniyeh last Wednesday. The Hamas leader was assassinated<\/strong> in a compound<\/strong> in Tehran<\/strong> that was run and protected by the Islamic Revolutionary Guards Corp in an upscale neighbourhood per the New York Times<\/strong>. The death of Haniyeh sent shockwaves in the region, with Iran\u2019s supreme leader allegedly giving the \u201cgreen light\u201d for Iran to directly attack Israel according to various media outlets. Furthermore, the situation appears to have escalated significantly, with the US stating that its citizens should book \u201cany ticket available to them\u201d , in addition to sending additional warships and military assets to the region in preparation of a full-blown war between Israel and Iran which also includes its proxy groups such as Hezbollah in Lebanon.<\/p>\n\n\n\n

Therefore, should the two nations decide to exchange blows, we may see safe-haven inflows into gold\u2019s price as it is considered to be a hedge during times of uncertainty. However, in the event of a de-escalation, it may weigh on gold\u2019s price.<\/p>\n\n\n\n

The sharp drop of US yields leaves gold unaffected<\/strong><\/h2>\n\n\n\n

Since our last report, we note that US yields uniformly dropped<\/strong> and stayed at relatively low levels. It\u2019s characteristic that the 2 year US bond yield reached levels not seen since 2023<\/strong>. The drop of US yields tends to imply that gold\u2019s alternative as a safe haven, namely US bonds, may not be as attractive for investors and thus divert their attention towards the precious metal. Yet that does not seem to be the case in the past few days as gold\u2019s price failed to benefit from the drop of US yields. Should US yields continue to fall, we may see them having a positive effect on gold\u2019s price in the next few days, although that remains to be seen. <\/p>\n\n\n\n

US recession worries in focus<\/strong><\/h2>\n\n\n\n

Following the US Employment data for July<\/strong>, widespread concerns<\/strong> about a potential recession in the US have risen. In particular,  the unemployment rate was expected to remain steady <\/a>at 4.1% and the average earnings growth rate to slow down to 3.7%, and the NFP<\/strong> figure to drop to 175k. Instead, the average earnings growth rate came in at 3.6%, the NFP figure dropped to 114k and the Unemployment rate ticked upwards to 4.3%, implying a loosening labour market in the US<\/strong>. As such, following the release of the US Employment data, widespread fears of a potential recession in the US led to a massive selloff across all asset classes, with investors opting to increase their cash holdings<\/strong>, possibly in order to re-enter the market once the dust settles. Hence, it appears that gold which was trading near its all-time high figure was not spared from the market selloff which saw Japan\u2019s Topix index tumbling more than 12% in the biggest sell-off since the \u201cBlack Monday<\/strong>\u201d crash of 1987. Nonetheless, should we see Fed policymakers adopting a more dovish tone in the coming week in order to ease market worries, it may further weigh on the greenback, which in turn may encourage investors<\/strong> to re-enter the market and thus could possibly aid the precious metal\u2019s price.<\/p>\n\n\n\n

Gold Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD Daily Chart<\/strong><\/h3>\n\n\n\n
\"Chart<\/figure>\n\n\n\n