Gold prices moved higher on Tuesday, with the precious metal trading around $3,392, as investors responded to rising tensions in the Middle East and mixed US Retail Sales data. Traders are also watching closely for the Federal Reserve’s interest rate decision expected on Wednesday.
The latest US Retail Sales numbers showed a 0.9% drop in May, worse than the expected 0.7% fall—marking the biggest decline since early 2024. Sales without autos also dropped by 0.3%, pointing to overall weak consumer spending. However, one key measure—the control group—rose by 0.4%, showing that some consumer strength still remains. This mixed data makes it harder for the Fed to decide whether to cut interest rates soon.
At the same time, tensions between Israel and Iran have escalated, with fresh reports of missile and drone attacks from both sides. These developments have raised fears of a wider regional conflict and threats to the Strait of Hormuz, a key oil supply route. In uncertain times, investors often turn to Gold as a safe-haven asset, pushing prices up.
Former US President Donald Trump denied reaching out to Iran for peace talks, calling such claims “fake news,” while warning of more attacks if Iran doesn’t back down. Israeli airstrikes and Iranian missile attacks have continued, increasing the risk of a full-scale war.
Looking ahead, all eyes are on the Fed’s Summary of Economic Projections. If the central bank signals fewer rate cuts due to inflation risks, gold might face pressure.
On the charts, gold is finding support near $3,375–$3,380. If it breaks above $3,408, it could rise to $3,446 or higher. But a drop below $3,371 might lead to a bigger fall toward $3,292.
