Gold Price Breaks $3,375 as Middle East Tensions and Fed Bets Lift Safe-Haven Demand

Gold prices surged past $3,373 on Thursday, supported by a sharp decline in the U.S. dollar and renewed demand for safe-haven assets.

Written by: Arslan Butt • Thursday, June 12, 2025 • 2 min read

• Last updated: Thursday, June 12, 2025

Quick overview

Gold prices surged past $3,373 due to a decline in the U.S. dollar and increased demand for safe-haven assets.
The U.S. Dollar Index fell to its lowest in nearly two months following a softer-than-expected CPI report, reinforcing expectations for Federal Reserve rate cuts.
Geopolitical tensions, including U.S. personnel withdrawals from the Middle East and ongoing trade negotiations, have further supported gold's appeal.
Technically, gold is challenging the $3,375 resistance, with potential targets of $3,405 and $3,434 if a breakout occurs.

Gold prices surged past $3,373 on Thursday, supported by a sharp decline in the U.S. dollar and renewed demand for safe-haven assets. The U.S. Dollar Index slipped to its lowest level in nearly two months following a softer-than-expected May CPI report, which showed consumer prices rising just 0.1% month-on-month. The annual inflation rate cooled to 2.4%, below forecasts, reinforcing the case for Federal Reserve rate cuts later this year.

Kelvin Wong, senior analyst at OANDA, noted the dollar’s slump was a “strong bullish catalyst,” especially as the technical breakout above the $3,346 level triggered automated buying. The market is now pricing in roughly 50 basis points of rate cuts by year-end, with investors looking to today’s PPI release for further clues.

Trump’s call for “significant rate cuts” post-CPI and the Fed’s dovish tilt are keeping the gold bulls in charge—particularly as traders eye potential policy shifts amid rising tariff risks.

Geopolitical Tensions Stoke Safe-Haven Appeal

Beyond economic drivers, increasing geopolitical risks added further layer of support for precious metal gold. President Trump announced U.S. personnel withdrawals from the Middle East, citing increased security threats tied to tensions with Iran. Simultaneously, a proposed framework to ease the U.S.-China trade war—confirmed by both Trump and Chinese officials—helped ease broader market volatility but did little to dent gold’s bid.

Investors often turn to gold during periods of geopolitical uncertainty, and the potential for higher tariffs on July 8 adds urgency to ongoing trade negotiations.

Key market factors driving the rally include:

Weaker U.S. dollar, making gold cheaper globally
Softer inflation print, reinforcing rate cut expectations
Rising Middle East tensions, supporting safe-haven inflows
Trump-Xi framework, easing trade uncertainty but not derailing gold bulls

Technical Outlook: Gold Eyes $3,405 Breakout

Gold (XAU/USD) is now challenging the $3,375 resistance zone, after reclaiming the 50-EMA on the 2-hour chart. The trend remains bullish, supported by higher lows and an intact rising trendline from the May 29 low.

GOLD Price Chart - Source: Tradingview — GOLD Price Chart – Source: Tradingview

The MACD has just flipped positive, with a bullish crossover and rising histogram bars pointing to renewed buying pressure. A breakout above $3,375 could trigger a run toward $3,405—and if momentum holds, a move to $3,434 isn’t out of the question.

Trade Setup

Entry: On breakout above $3,378
Stop-loss: Below $3,341
Target 1: $3,405
Target 2: $3,434
Risk Level: Moderate; watch MACD and candle closes

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.