Gold Price Forecast: XAU/USD rises near $3,400, remains supported by Middle East tensions

LONDON (June 17) Gold price (XAU/USD) trades 0.4% higher to near $3,400 during European trading hours on Tuesday. The yellow metal edges up as demand for safe-haven assets remains firm amid conflicts in the Middle East.

Airstrikes between Iran and Israel have accelerated after Israeli Defence Forces (IDF) assassinated Iran’s senior-most military official Ali Shadmani, CNBC reported. In retaliation, Iranian military forces have launched ballistic missiles on Israeli intelligence agency Mossad’s headquarters.

Meanwhile, sluggish US Dollar (USD) has also supported the Gold price. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks down to near 98.00. Technically, lower US Dollar makes the Gold price a value bet for investors.

Going forward, investors will focus on the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. The Fed is almost certain to leave interest rates steady in the current range of 4.25%-4.50%.

Investors will closely monitor Fed’s ‘dot plot’, which shows where policymakers see interest rates heading in the near and long term. Additionally, market participants will also focus on fresh inflation and economic forecasts.

Higher-for-longer interest rates by the Fed bode poorly for non-yielding assets, such as Gold.

-FXStreet