Invest in gold as Middle East progress takes center stage

For several weeks, gold had been trapped under a heavy cloud, squeezed by a trio of relentless forces. First, geopolitical chaos in the Middle East and the Strait of Hormuz kept energy supply risks simmering. Second, the same tensions sent energy prices climbing, indirectly hammering precious metals. Third, the Federal Reserve's (Fed) hawkish drumbeat added another layer of pressure. At its late‑April meeting, the central bank held interest rates at 3.75%, giving the American dollar a boost and shoving bullion further into the red.

This triple blow triggered a mild retreat, pulling quotes back to $4,500 per ounce.

But then the script flipped. By midweek, market sentiment took a sharp turn. Hopes of a US-Iranian breakthrough and talks of a possible diplomatic accord seized the spotlight and recast the entire narrative. With conflict resolution suddenly being in view, geopolitical risks began to subside, energy prices softened, and gold started clawing its way higher.

If a Middle East peace deal continues to gain traction, it will open the path for a sustained uptrend in the precious metal. The first milestone along the road? A test of the $4,900 resistance.

The final recommendation: 

— Buy gold at the current price, targeting $4,900 per troy ounce within one to two weeks.

— To shield ourselves from adverse market movements, place a Stop Loss order just beneath the support level, at $4,650.