Geopolitical Tensions Continue to Provide Support for the Gold Market, Although They Are Unlikely to Offer Sustained Rally

Commodity

Middle East Situation

Summary:

Ongoing geopolitical tensions supported safe-haven assets, halting the previous day's retreat from a nearly two-month high. However, investors appeared hesitant to act, opting to await further clarity on the Federal Reserve's rate-cut trajectory before establishing new directional positions.

SELL XAUUSD

EXP

EXPIRED

3418.00

Entry Price

3287.00

3448.00

4211.67 +13.76 +0.33%

Pips

EXPIRED

3287.00

3342.99

Exit Price

3418.00

Entry Price

3448.00

Fundamentals

On Tuesday, the focus in the gold market will remain on the geopolitical tensions in the Middle East. Safe-haven buying continues to support gold prices due to the persistent uncertainty.

Furthermore, gold ETFs collectively increased their holdings by 136,032 ounces of gold in the most recent trading session. According to statistics, the net buying by ETFs this year has reached 6 million ounces. The world's largest gold ETF, SPDR Gold Shares, also recorded an inflow of US$285 million last Friday, the largest single-day inflow in several weeks. These factors continue to provide support for the upward movement of gold prices.

However, in the long term, the conflict between Iran and Israel is unlikely to boost gold prices. The gold market's reaction to the escalating conflict between Israel and Iran remains very moderate. Gold prices have risen by less than 1% since Israel's initial attack.

We think that the market's reaction was primarily driven by speculative actors and algorithmic trading systems within the futures market, rather than by physical safe-haven demand. Furthermore, the elevated pre-conflict gold prices suggest limited potential for further algorithmic-driven increases, aligning with historical patterns where geopolitical events do not sustain long-term gold price appreciation.

Currently, investors appear hesitant, preferring to await further clarity on the Federal Reserve's interest rate trajectory before establishing new directional positions. Consequently, market attention will remain centered on the outcomes of the two-day Federal Open Market Committee meeting on Wednesday, the agenda of which should provide fresh impetus for both the U.S. dollar and non-yielding gold.

Geopolitical Tensions Continue to Provide Support for the Gold Market, Although They Are Unlikely to Offer Sustained Rally_1

Technical Analysis

Following a brief test of US$3,450 on Monday, gold prices exhibited signs of waning upward momentum. This aligns with the retracement structure following the completion of a head and shoulders bottom pattern. We anticipate this retracement to be followed by another decline after a brief rally.

During Tuesday's European session, gold prices found support above US$3,370, subsequently breaching prior highs on the 5- and 15-minute technical charts, establishing a crucial foundation for a rebound. If prices do not retrace below the intraday low of US$3,374, a short-term bottoming structure will form, testing the midpoint of the significant correction at the US$3,420 range, followed by a further decline to test the support level near the US$3,335 range.

Conversely, a breach above US$3,445 by the bulls would invalidate the bearish forecast.

Trading Recommendations

Trading Direction: Sell

Entry Price: 3418

Target Price: 3287

Stop Loss: 3448

Valid Until: July 2, 2025 23:55:00

Support: 3374, 3366, 3340

Resistance: 3418, 3422, 3430

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

GBP/JPY retreats slightly after the BoJ decision but remains buoyed above 196.00. Sterling’s broader weakness weighs, with focus turning to the BoE’s upcoming rate verdict.

BUY GBPJPY

Close Time

CLOSED

196.400

Entry Price

200.000

195.000

206.876 -0.224 -0.11%

129.6

Pips

Profit

195.000

197.696

Exit Price

196.400

Entry Price

200.000

The British pound extended its mild retreat on Tuesday, pulling back from Monday’s intraday high of 196.85 against the Japanese yen, as traders digested the Bank of Japan’s latest monetary policy decision. Despite the pullback, the GBP/JPY pair continues to exhibit bullish resilience, holding firmly above last week’s peak at 196.00 — a level now acting as key near-term support.

The Bank of Japan (BoJ), as anticipated by market participants, kept its benchmark short-term interest rate unchanged at 0.5% — a level it raised to earlier this year in a landmark departure from years of ultra-loose policy. But while the decision itself held no surprises, it was the accompanying tone and forward guidance that prompted market contemplation.

BoJ Governor Kazuo Ueda, in a somewhat cautious post-meeting press briefing, suggested that while the central bank remains data-dependent, the pace of tightening would be slow and measured. Of note, Ueda flagged a planned reduction in the pace of bond tapering — a deliberate move not expected to begin until April 2026. The message was clear: Japan’s central bank is in no rush to normalize policy aggressively, despite modest inflationary pressures and external uncertainties.

Ueda struck a decidedly neutral stance, neither committing to further rate hikes nor leaning too heavily on dovish rhetoric. However, his comment that inflation is “not rising in an accelerated way” signaled that the BoJ may continue to err on the side of caution, especially amid a murky global trade outlook and the risk of external shocks. This tone was enough to prevent any significant appreciation of the yen, leaving most of the GBP/JPY pair’s dip to be attributed to softness in the British pound itself.

Indeed, the pound traded defensively across the board, falling 0.2% against the US dollar and 0.3% versus the euro. The weakness stems from a growing sense of unease over the UK’s macroeconomic backdrop. A trifecta of downbeat data last week — covering GDP, industrial production, and employment — has cast a shadow over the pound ahead of the Bank of England’s (BoE) monetary policy announcement scheduled for Thursday.

The BoE is widely expected to hold its key policy rate steady, but the question now centers on the tone of the statement and any potential dissenting votes. Market participants are keenly awaiting whether Governor Andrew Bailey and his colleagues will maintain a hawkish lean or begin to prepare markets for potential cuts later this year. With inflation still sticky, the BoE’s room to maneuver remains constrained, yet weakening growth indicators are complicating its path forward.

Technical Analysis

From a technical perspective, the GBP/JPY remains entrenched within a bullish price channel. After consolidating above the 195.80 mark — a key horizontal resistance zone — the pair staged a strong rebound that took it near the recent high at 196.85. While profit-taking and broader pound softness have momentarily paused the uptrend, the structure remains supportive of further gains.

Momentum indicators, particularly the stochastic oscillator, suggest a potential reacceleration of bullish momentum. As the oscillator approaches overbought territory, traders are watching for confirmation of renewed buying interest that could target the next key resistance zones at 197.45 and 198.80, respectively.

Unless the pair breaks below 195.85 — the lower end of the projected intraday trading range — the near-term trend remains upward. Continued support above this level would keep the door open for another test of 197.00 and potentially a push toward the psychological 200.00 mark in the coming weeks, contingent on favorable developments from both the BoE and global risk sentiment.

TRADE RECOMMENDATION

BUY GBPJPY

ENTRY PRICE: 196.40

STOP LOSS: 195.00

TAKE PROFIT: 200.00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

Gold prices trade firmer near $3,400 amid escalating Middle East tensions and a weaker U.S. Dollar, while markets brace for the Federal Reserve’s interest rate decision.

BUY XAUUSD

Close Time

CLOSED

3395.06

Entry Price

3500.00

3350.00

4211.67 +13.76 +0.33%

450.6

Pips

Loss

3350.00

3349.98

Exit Price

3395.06

Entry Price

3500.00

Gold prices rose during European trading on Tuesday, with spot XAU/USD advancing 0.4% to hover near the psychologically significant $3,400 mark. The uptick comes as investors seek refuge in safe-haven assets amid rising geopolitical risk and a softening U.S. Dollar, ahead of a pivotal Federal Reserve policy decision.

The move higher in bullion follows renewed conflict in the Middle East after an explosive development late Monday. According to CNBC, Israeli Defence Forces (IDF) carried out a high-profile targeted strike that killed Iran’s top military official, Ali Shadmani. Tehran retaliated forcefully, reportedly launching a series of ballistic missiles aimed at Mossad's intelligence headquarters — a rare direct escalation between the two long-standing adversaries.

With the specter of a broader regional war looming, investor appetite for risk has cooled, driving demand into traditional safe-haven assets such as gold, Treasuries, and the Swiss franc. The yellow metal, in particular, remains a favored hedge amid military and macroeconomic uncertainty.

Gold’s climb was further underpinned by a softer U.S. Dollar, as the Dollar Index (DXY) slipped toward the 98.00 handle. The greenback’s decline reflects growing investor caution ahead of Wednesday’s Federal Open Market Committee (FOMC) rate decision, where policymakers are widely expected to keep interest rates unchanged in the 4.25%-4.50% corridor.

A weaker Dollar typically benefits gold by lowering its cost to foreign buyers and enhancing its appeal as an alternative store of value. As inflation pressures ease and global monetary policy enters a more data-dependent phase, gold may continue to attract flows, especially if the Fed leans dovish.

“Markets are pricing in the possibility that the Fed could pivot sooner than previously expected, especially if inflation momentum continues to wane,” said an FX strategist at a major European bank. “This environment is typically constructive for gold, particularly with geopolitical tensions heating up.”

Traders are now laser-focused on the Fed’s updated economic projections and the so-called ‘dot plot,’ which offers a glimpse into policymakers’ views on the future path of interest rates. While no change in rates is expected this week, forward guidance could prove critical in shaping market direction.

A reiteration of the Fed’s “higher-for-longer” narrative would likely pose headwinds for gold, given the metal’s non-yielding nature. Conversely, any indication of easing or a shift in tone could reinforce gold’s bullish trajectory.

Technical Analysis

From a technical perspective, gold remains well-supported despite Monday’s dramatic intraday reversal. The yellow metal had surged to a session high near $3,450 before retreating sharply to lows around $3,375, as headlines hinted at possible ceasefire discussions. The whipsaw action, however, failed to break key trend support.

On the hourly chart, gold found buying interest at the 0.5 Fibonacci retracement level of the $3,293–$3,452 leg — located near $3,372 — a zone that now acts as pivotal support. This retracement level coincides with the ascending trend line, preserving the broader bullish bias for now.

Moreover, the Relative Strength Index (RSI) rebounded from oversold territory, while the price continues to hold above the 50-period Exponential Moving Average (EMA50), suggesting that the short-term correction may have exhausted itself.

As long as gold sustains above the $3,370–$3,375 band, a retest of $3,420–$3,450 remains likely. A break above this resistance zone could open the door for a fresh attempt at all-time highs, particularly if the Fed surprises markets with a dovish tilt.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 3395

STOP LOSS: 3350

TAKE PROFIT: 3500

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

The Bank of Japan has maintained its current interest rate. However, recent weak economic and employment data from the U.S. have increased market expectations for a Federal Reserve rate cut. This divergence in monetary policy between the two countries may exert downward pressure on the USDJPY.

SELL USDJPY

Close Time

CLOSED

144.582

Entry Price

140.800

145.600

155.074 -0.271 -0.17%

101.8

Pips

Loss

140.800

145.602

Exit Price

144.582

Entry Price

145.600

Fundamentals

Today, the Bank of Japan (BOJ) announced its monetary policy decision, maintaining the benchmark interest rate at 0.5% and slowing the pace of its government bond purchase reduction to mitigate potential market instability. Despite market expectations for further policy adjustments, Governor Kazuo Ueda's press conference remarks were cautious, emphasizing continued rate hikes if economic and price conditions improve, without specifying a timeline.

Although the BOJ's decision held rates steady, the likelihood of further rate hikes in Japan is gradually increasing amid persistent inflation, with the yen's policy advantages becoming more apparent.

In the U.S., recent economic and employment data have been weak, dampening expectations for the Federal Reserve to maintain high interest rates this year, and increasing market bets on a September rate cut. Coupled with escalating global trade concerns, the U.S. Dollar Index has weakened, trading near a three-year low.

Overall, the divergence in monetary policy paths between Japan and the U.S. is evident. Even with the BOJ's unchanged stance, the narrowing interest rate differential driven by the Federal Reserve remains the primary factor driving the USDJPY lower, intensifying the downward pressure on the currency pair.

Technical Analysis

Head and Shoulders Top Pattern Breakdown Targets 140.00!_1

In the 1D timeframe, the USDJPY initiated a bullish rebound after establishing a bottom at 140.00. However, recent price action reveals a pattern of lower highs, indicating diminishing bullish momentum and an increasing probability of a decline. Furthermore, the recent price action has consistently been capped by the MA60, which further elevates the likelihood of a short-term downturn.

Head and Shoulders Top Pattern Breakdown Targets 140.00!_2

In the 4H timeframe, the USDJPY has formed a head and shoulders top pattern. If the price action continues to weaken below the right shoulder at 145.10, the head and shoulders top pattern will be validated. The initial downside target could be a test of the 140.00 support level. A breach of this support level would likely trigger a more significant downward movement.

Trading Recommendations

Trading Direction: Sell

Entry Price: 144.80

Target Price: 140.80

Stop Loss: 145.60

Valid Until: July 1, 2025 23:00:00

Support: 142.47, 140.00

Resistance: 145.46, 146.27

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This could signal the beginning of a downward correction, with potential downside extending toward the 0.5988 area.

SELL NZDUSD

Close Time

CLOSED

0.60600

Entry Price

0.59900

0.60900

0.57841 +0.00087 +0.15%

46.0

Pips

Profit

0.59900

0.60140

Exit Price

0.60600

Entry Price

0.60900

The Business NZ Performance of Services Index (PSI) in New Zealand dropped sharply to 44.0 in May, down from April’s 48.1. This marks the lowest reading since June 2024 and signals a fourth consecutive month of contraction, reinforcing concerns over persistent weakness in the country’s service sector.

In Asia, fresh data from China’s National Bureau of Statistics revealed that retail sales rose by 6.4% year-over-year in May, beating both the forecasted 5.0% and April’s 5.1% increase. However, industrial production came in slightly below expectations, climbing 5.8% annually versus the projected 5.9% and the previous month’s 6.1%. The mixed data raised questions about the sustainability of China’s post-pandemic recovery momentum.

Meanwhile, U.S. Commerce Secretary Howard Lutnick announced a tentative framework agreement aimed at lowering tariffs and easing restrictions on rare earth trade. Despite the headlines, market response remained subdued due to the vague details of the agreement and lingering doubts over its long-term effectiveness.

Adding to the cautious mood, concerns over U.S. economic resilience resurfaced following disappointing data from the New York Federal Reserve. The Empire State Manufacturing Index plunged to -16.0 in June from -9.2 in May, significantly missing expectations of -5.5. This marked the weakest print since March’s two-year low of -20.0 and highlighted growing strains in regional factory activity, increasing fears of a broader economic slowdown.

Geopolitical tensions also remained in focus. President Donald Trump reiterated the United States’ strong backing of Israel, stating on Sunday that while he hopes for peace between Israel and Iran, “they’ll have to fight it out.” According to reports, Trump declined an Israeli proposal to target Iran’s Supreme Leader Ayatollah Ali Khamenei, reaffirming his preference to avoid direct U.S. military involvement—at least for now.

On the inflation front, the U.S. Producer Price Index (PPI) for May pointed to further signs of softening price pressures. Headline PPI rose by 2.6% year-over-year, in line with expectations and slightly above April’s 2.5%. However, core PPI—which strips out volatile food and energy components—fell to 3.0% from 3.2%, reinforcing the view that underlying inflation is gradually cooling.

This data followed weaker-than-expected CPI figures earlier in the week, boosting market confidence that the Federal Reserve could move toward a rate cut as soon as September. With inflation slowing and economic growth showing signs of fatigue, expectations for a more dovish monetary policy have risen. In turn, this has supported gold prices, as lower real yields typically benefit the non-yielding metal. A Bearish Correction Looms After Key Resistance Rejection_1

A Bearish Correction Looms After Key Resistance Rejection_1

Technical Analysis

On the technical front, NZD/USD appears to have found strong resistance near the 0.6080 level, where the pair has reacted with bearish candlesticks on the one-hour chart. This could signal the beginning of a downward correction, with potential downside extending toward the 0.5988 area. The 100-period and 200-period moving averages are located at 0.6037 and 0.6011, respectively, providing room for a short-term pullback before the pair defines a clearer trend on higher timeframes.

Moreover, the Relative Strength Index (RSI) recently touched 66, approaching the overbought threshold. This suggests that bullish momentum may be weakening. A break below the nearest moving average—specifically the 100-period—could accelerate the downward move toward the next support level. Should price fail to reclaim higher ground, this rejection zone could mark the beginning of a deeper corrective phase.

Trading Recommendations

Trading direction: Sell

Entry price: 0.6060

Target price: 0.5990

Stop loss: 0.6090

Validity: Jun 20, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The RSI has reached the 70 mark, entering overbought territory while forming a bearish divergence. This could be interpreted as a warning signal of a potential downside reversal, which may accelerate the pair’s retreat.

SELL EURUSD

Close Time

CLOSED

1.15766

Entry Price

1.14950

1.16200

1.16542 +0.00116 +0.10%

14.8

Pips

Profit

1.14950

1.15618

Exit Price

1.15766

Entry Price

1.16200

Fresh concerns over the U.S. economy weighed on the dollar after the latest New York Fed data showed a deeper contraction in regional manufacturing activity. The Empire State Manufacturing Index fell sharply to -16.0 in June, down from -9.2 in May and well below market expectations of -5.5. This marked the weakest reading since March's two-year low of -20.0, highlighting deteriorating momentum in the factory sector and adding to fears of a broader regional slowdown.

Meanwhile, U.S. President Donald Trump reaffirmed Washington’s strong support for Israel, stating on Sunday that although he hopes for a resolution between Israel and Iran, “they’ll have to fight it out.” Trump reportedly rejected a proposal from Israeli leadership to strike Iran’s Supreme Leader Ayatollah Ali Khamenei, emphasizing his current stance of keeping the United States from becoming directly involved in the escalating conflict—at least for the time being.

On the economic front, the release of the U.S. Producer Price Index (PPI) for May offered further signs that inflation may be softening. Headline PPI rose 2.6% year-over-year, aligning with economists’ expectations and marginally above April’s figure of 2.5%. However, the core PPI—which excludes food and energy—slipped to 3.0% from 3.2%, reinforcing the notion that underlying price pressures are beginning to ease.

Following the weaker-than-anticipated Consumer Price Index (CPI) data earlier in the week, this latest PPI report strengthened market sentiment that the Federal Reserve could consider a rate cut as early as September. With inflationary pressures easing and growth showing signs of fatigue, the odds of a dovish policy pivot have increased. Lower interest rate expectations typically serve as a tailwind for gold, which tends to shine in environments where real yields are falling due to its non-interest-bearing nature.

In Europe, ECB Governing Council member Joachim Nagel struck a cautious tone in his remarks on Monday at the Frankfurt summit. He warned against prematurely signaling an end to rate cuts or committing to a pause, citing ongoing uncertainties—particularly related to geopolitical tensions in the Middle East. While inflation appears to be nearing the central bank’s target, Nagel emphasized the importance of maintaining a data-dependent, meeting-by-meeting approach.

Adding to the cautious narrative, fresh data from Eurostat showed that wages across the eurozone rose 3.4% year-over-year in Q1 2025, decelerating from the 4.1% increase in the previous quarter. This represents the slowest pace of wage growth since Q3 2022 and may offer some relief to the European Central Bank as it continues to navigate a delicate balance between softening inflation and sluggish growth. A Bearish Correction May Be Brewing Beneath the Surface_1

A Bearish Correction May Be Brewing Beneath the Surface_1

Technical Analysis

EUR/USD once again faced selling pressure near the 1.1614 level, where bearish candlestick formations have started to emerge. The pair now appears vulnerable to a pullback toward the next support zone around 1.1495. This area is notably close to the 100- and 200-period moving averages on the 1-hour chart, currently positioned at 1.1515 and 1.1466, respectively—creating a potential magnetic zone for price action.

Additionally, the RSI has reached the 70 mark, entering overbought territory while forming a bearish divergence. This could be interpreted as a warning signal of a potential downside reversal, which may accelerate the pair’s retreat. However, if EUR/USD manages to decisively break above the 1.1614 resistance level, it could pave the way for the continuation of the prevailing bullish trend.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1573

Target price: 1.1495

Stop loss: 1.1620

Validity: Jun 20, 2025 15:00:

Risk Warnings and Disclaimers

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Eva Chen

Cryptocurrency

Summary:

Ethereum prices are undergoing a pullback and may retreat to $2,500 before another upward correction. The potential for a golden cross in Ethereum prices may signal strong buying momentum. Timing and market conditions are crucial for the next move.

BUY ETH-USDT

Close Time

CLOSED

2551.70

Entry Price

3285.00

2270.00

3130.54 +103.58 +3.42%

2817.0

Pips

Loss

2270.00

2269.69

Exit Price

2551.70

Entry Price

3285.00

Fundamentals

Last week, Ethereum prices broke through the previous high of $2,788 before experiencing another pullback. This pullback occurred against the backdrop of strong selling pressure following a successful breakout.

Recently, Ethereum prices have seen a volatile market within the range of $2,400 to $2,800. Despite significant price fluctuations, market sentiment remains optimistic. The pullback is viewed as a necessary measure to gain more liquidity before the next rally. The strong support above $2,400, evidenced by long-term investors' buying on dips, underscores this point.

On the fundamental front, increased whale activity on the Ethereum network may serve as a positive indicator for the cryptocurrency's future trajectory. A report from Santiment reveals that Ethereum whales held a total of 1.49 million ETH, valued at $38.26 million, over the past 30 days. This indicates a 3.72% increase in the total holdings of investors with 1,000 to 100,000 ETH.

The increase in whale activity is considered a bullish signal, as these large holders typically accumulate assets in anticipation of long-term price appreciation. These whales are lining up to prepare for the next significant price surge, which may propel Ethereum prices to break through previous resistance levels.

Although Ethereum's trading prices have primarily fluctuated between $2,400 and $2,800, the substantial increase in whale activity suggests that the cryptocurrency is laying the groundwork for future price appreciation. Despite a 2.38% decline in Ethereum prices over the past 30 days, the outlook remains optimistic.

Data indicates that US investors are aggressively buying Ethereum, as evidenced by the substantial growth in Ethereum ETFs. According to SoSoValue, Ethereum spot ETFs have recorded inflows for five consecutive weeks. Last week, these funds saw cash inflows of $528 million, compared to $281 million the previous week. This growth has brought the total net inflows to $3.85 billion, with the total assets held by these funds now exceeding $10 billion.

Bullish Outlook Despite Bearish Daily Cross_1

Technical Analysis

A golden cross occurs when the MA50 moves above the MA200, a classic bullish signal in technical analysis. For Ethereum, this formation has historically led to significant price surges. The last time ETH formed this pattern, it soared by approximately 35% within just three weeks, highlighting its importance to investors.

Currently, the MA50 and MA200 of Ethereum prices are rapidly converging. If Ethereum prices hold the current support level and trading volume maintains upward momentum, a golden cross is likely. However, key resistance zones and macroeconomic conditions remain critical.