FX.co ★ Gold Extends Advance

Gold prices climbed to approximately $3,290 on Wednesday, extending a gain of over 2% from the previous day. This increase was fueled by rising geopolitical tensions and continued weakness in the US dollar. Market sentiments were impacted by reports suggesting that Israel is planning to target Iranian nuclear facilities, which has heightened fears about a potential escalation in Middle East conflicts, as such an action might prompt a retaliatory response from Iran. In another geopolitical development, President Trump announced that Russia and Ukraine are set to begin ceasefire negotiations imminently. However, he indicated a withdrawal from directly mediating the three-year stand-off. Concurrently, the US dollar continued to remain subdued due to the Federal Reserve's cautious economic projections and Moody’s decision to downgrade the US credit rating, citing escalating debt levels as a concern. Investor confidence has been further rattled by persisting uncertainties related to tariff policy decisions and an impending critical vote on Trump's key tax reform initiatives. The depreciation of the US dollar has rendered gold more affordable for international purchasers, consequently boosting demand.