ING commodities strategists Warren Patterson and Ewa Manthey report that Gold is trading in a narrow range as the US‑Israeli conflict with Iran extends. A firmer Dollar and higher real yields offset safe‑haven demand from Middle East tensions. They remain constructive on Gold over the medium term but warn that prolonged conflict and higher-for-longer rates pose downside risks.

Safe haven demand meets rate headwinds

"Gold is trading in a narrow range as the US‑Israeli conflict with Iran drags into a third week. A firmer US dollar and higher real yields are offsetting geopolitical support."

"While elevated energy prices and Middle East tensions continue to underpin safe‑haven demand, concerns that inflation pressures could delay Federal Reserve rate cuts have capped the upside."

"In the near term, gold remains caught between geopolitical risk and macro headwinds from higher rates. We remain constructive over the medium term amid diversification demand, central bank buying and stagflation risks. "

"Yet, downside risks persist if the conflict is prolonged, reinforcing a higher-for-longer rates outlook. Still, with prices up around 16% year‑to‑date, the pullback so far has been relatively contained. Any deeper correction would likely attract buyers."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)