GOLD spiked higher, falling narrowly short of the all-time high

XAUUSD ANALYSIS
- Gold spiked higher, falling narrowly short of the all-time high
- FX markets captured the flight to safety while US equity markets were shut
- Gold volatility index eyed ahead of the weekend

XAUUSD SPIKED HIGHER, FALLING NARROWLY SHORT OF THE ALL-TIME HIGH
Gold prices surged on Friday morning following reports of an Israeli strike on Iran, raising concerns of a broader conflict. The uncertainty in the Middle East has contributed to the increase in gold prices, approaching its all-time high of $2431. Although gold remains overbought on the daily chart, the bullish momentum seems to be slowing down. The support level is at $2360, with further interest around $2320. Despite a strong US dollar and rising Treasury yields, central bank buying continues to support the upward trend in gold.

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🔹BREAKING - A majority of members of the US House of Representatives voted in favor of a bill that could effectively ban the TikTok application in the United States

- The project is part of a package of draft laws to provide aid to allies around the world worth $95 billion

- Voting is still ongoing in the Republican-controlled chamber

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The USD price rose sharply after US Federal Reserve Chairman Jerome Powell mentioned that the US economy does not yet exhibit signs of inflation reaching the central bank's 2% target. He acknowledged that it might take longer than anticipated to lower interest rates. The Fed Chairman's decision on interest rates, coupled with the search for a safe investment amidst mounting geopolitical tensions following Iran's attack on Israel, further bolstered the strength of the USD.

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ECB officials are focusing on the June 6 policy decision. This is considered when the ECB will start cutting interest rates. Villeroy has been a vocal supporter of such a move, while his more hawkish colleagues have expressed less certainty.

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Easing concerns about widespread conflict in the Middle East have boosted investors' risk appetite, reducing safe-haven demand for gold bars. Besides, the wave of selling to take profits when gold prices rose to a record high is also the reason why gold plummeted today.