Gold Prices Climb as Debt Concerns and Geopolitical Risks Persist

 Key Takeaways:

*Rising geopolitical tensions between Israel and Iran add to safe-haven demand.

*Market attention remains on Trump’s proposed fiscal package, which could worsen debt outlook.

Gold prices edged higher on Tuesday, supported by a combination of escalating U.S. fiscal concerns and renewed geopolitical tensions in the Middle East. With a lack of major economic data releases, market participants have turned their focus to structural risks—particularly the U.S. debt situation and potential military escalation between Israel and Iran. The continued depreciation of the U.S. dollar, triggered in part by Moody’s recent downgrade of the U.S. credit rating, has added further upward pressure on the precious metal.

Investor sentiment remains cautious ahead of a key vote on former President Donald Trump’s expansive tax cut and spending proposal, which analysts warn could increase the national debt by $3 to $5 trillion. Given that the U.S. debt already stands at $36.2 trillion, and considering the lack of consensus within the House of Representatives, concerns over fiscal sustainability remain elevated—creating a favorable environment for gold as a safe-haven asset.

Technical Analysis

XAU/USD, H4

Gold is currently hovering near a critical resistance level at $3355.00, as traders await confirmation of a breakout. A successful close above this level could open the door to further upside toward the next key resistance at $3440.00.

However, the MACD indicator is signaling fading bullish momentum, and the RSI at 67 is approaching overbought territory—suggesting that a short-term correction may be imminent if bullish momentum fails to sustain. On the downside, key support levels are seen at $3240.00 and $3120.00.

Resistance Levels: 3355.00, 3440.00
Support Levels: 3240.00, 3120.00