Gold (XAU/USD) is extending its gains as Israel's attacks on Iran continue, supporting demand for the safe-haven precious metal.

At the time of writing, Gold is trading near $3,430, with a surge in bullish momentum potentially opening the door for a retest of the $3,500 record high in the near term.

The attacks by Israel on Iran's nuclear facilities have resulted in a broad ‘risk-off' tone throughout markets, supporting Gold's rise.

Recent news indicates that the United States and Israel have warned that attacks are likely to persist, leading to a surge in gold prices, which are currently trading at $3,430.

In a televised interview with ABC News, President Donald Trump said, "We warned them and they ignored it. They've been hit harder than ever before, and there's plenty more where that came from."

In a post on social media, President Trump stated, "I gave Iran chance after chance to make a deal. I told them, in the strongest of words, to 'just do it,' but no matter how hard they tried, no matter how close they got, they just couldn't get it done,".

Governments around the world, from Riyadh to Beijing, have condemned the strikes. China's Foreign Ministry spokesman Lin Jian called on all sides "to push for regional peace, stability, and to steer clear of further escalation."

US economic data released Friday showed a notable improvement in consumer sentiment alongside a moderation in inflation expectations, according to the first round of preliminary figures from the University of Michigan (UoM) for June.

The Michigan Consumer Expectations Index surged to 58.4, up from 47.9, while the Consumer Sentiment Index climbed to 60.5, well above expectations of 53.5 and up from 52.2 in May.

Meanwhile, inflation expectations showed signs of easing, with the 1-year outlook falling to 5.1% from 6.6%, and the 5-year outlook edging down to 4.1% from 4.2%. As preliminary data, these figures offer an early snapshot of consumer attitudes and price expectations, which could still be revised.

This data generally supports the argument for the US Federal Reserve (Fed) to cut interest rates due to slowing inflation. However, with oil prices surging following the attacks in Iran, the Fed's comments at the upcoming Federal Open Market Committee (FOMC) meeting could take a different direction on Wednesday.

However, the escalation in Middle East tensions introduces new uncertainty that could affect global markets, energy prices, and inflation expectations, potentially complicating the Fed's policy path despite the encouraging economic signals.

The final survey figures are scheduled for release on June 27, providing a more comprehensive picture of consumer sentiment and inflation expectations amid evolving global conditions.

Source: Fxstreet