'Gold may hit $3,700 as Middle East tensions rise'

New Delhi, June 22 (IANS) Gold prices are expected to rise sharply as fresh geopolitical tensions in the Middle East increase global uncertainty, market experts said on Sunday.

The US airstrike on Iranian nuclear facilities has triggered concerns among investors, pushing them towards safe-haven assets like gold.

On Friday, gold prices had initially fallen, as markets hoped that US President Donald Trump might opt for diplomatic talks instead of military action.

However, prices quickly bounced back by the end of the day in New York. The long lower shadow on the daily chart indicated that traders were already bracing for a possible escalation over the weekend.

Experts believe gold could trade in the range of $3,500 to $3,700 in the coming weeks. Akshay Chinchalkar of Axis Securities said that as long as spot gold remains above $3,314, it could move higher towards $3,770.

He added that the options market is showing a bullish trend, which signals that many investors are betting on higher prices.

Silver is also expected to benefit from the rally in gold, though at a slower pace. It may rise towards $40, with support at $33.68.

Chinchalkar noted that silver and gold have shown a strong positive connection over the past 10 years, and silver usually follows gold’s direction.

So far in 2025, gold has gained over 25 per cent and silver more than 24 per cent. This shows that investors are turning to precious metals as a shield against growing risks like inflation and geopolitical conflict.

Global investment bank Goldman Sachs continues to remain positive on gold. In a recent note, it said strong buying by central banks is supporting the price of gold and lifting the gold-to-silver ratio.

However, Goldman does not expect silver to keep pace with gold’s rise and sees gold as the stronger performer.

The bank's base case expects gold to hit $3,700 per ounce by the end of 2025 and reach $4,000 by mid-2026.

If there’s a global recession, prices could jump to $3,880 due to increased investments in gold-backed ETFs.

In a more extreme situation -- like concerns over the independence of the US Federal Reserve or a change in US reserve policy -- gold could even hit $4,500, the bank said.

--IANS

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