Morning Note: Gold Nears High on Mideast Tensions; Franc Soars; ECB Update

Gold Nears All-Time High Amid Israel-Iran Tensions

Gold prices edged closer to a record high as rising tensions between Israel and Iran spurred demand for safe-haven assets. The precious metal surged up to 0.6% today in Asian trading, reaching near $3,450 an ounce, just $50 away from its all-time high set in April. The weekend saw a dramatic exchange of missile and drone strikes between the two nations, stoking fears of broader regional instability. These hostilities also lifted energy prices amid concerns over potential disruptions to infrastructure and transport routes in the Middle East.

This fresh wave of geopolitical risk has intensified a gold rally already supported by broader macroeconomic factors. So far in 2025, gold has gained over 30%, partly fuelled by central banks diversifying away from the US dollar and investor concerns over slowing global growth triggered by President Donald Trump’s tariff policies. Furthermore, soft US inflation and employment data reinforced expectations of a Federal Reserve rate cut later this year, which could enhance the demand for gold for investors.

(Gold Daily Price Chart, Source: Trading View)

From a technical analysis perspective, the gold price has been in a bearish trend since mid-May 2025, as indicated by the series of lower highs and lower lows. Recently, however, it broke above the descending channel and the resistance zone of 3,375 – 3,395, signalling a continuation of bullish momentum. This valid breakout could potentially push the price further upward, with a retest of the order block in the 3,490 – 3,500 range.

Investors Demand Lifts Swiss Franc to 13-Year High

The Swiss franc hovered around 0.81 per US dollar, trading near its strongest levels since 2011, as investors sought perceived safe-haven assets amid mounting geopolitical tensions. The surge in demand followed a wave of Israeli airstrikes on Iran last Friday, targeting nuclear sites and military facilities, which reportedly killed two senior commanders. Furthermore, Israel and Iran launched additional attacks against each other on Sunday, resulting in civilian casualties and injuries. The escalating violence has heightened fears of a broader regional conflict, as both militaries advised civilians on the other side to take safety measures in anticipation of further strikes.

Beyond geopolitical tensions, several other factors have contributed to the franc’s nearly 10% appreciation this year. These include uncertainty over President Trump’s trade agenda and broad-based weakness in the US dollar, fueled by cooling inflation and growing concerns about the US economy and fiscal stability. Together, these forces have reinforced the Franc’s appeal as a reliable store of value in turbulent times.

(USD/CHF Daily Chart, Source: Trading View)

From a technical analysis perspective, the USD/CHF currency pair has been in a bearish trend since mid-January 2025, as indicated by the formation of lower highs and lower lows. Recently, it found support at the order block between 0.8060 and 0.8090, which prevented the pair from forming new lower lows. Instead, it appears to be developing a double bottom candlestick pattern. As a result, the price may potentially move higher to retest the previous swap zone at 0.8170 – 0.8200, which could help determine its next directional move.

Lagarde Sees Inflation Goal, Digital Euro Progress

The European Central Bank’s 2% inflation target is now within reach, according to ECB President Christine Lagarde. In an interview with China’s Xinhua news agency, published on the ECB website, Lagarde emphasised that financial stability is essential for maintaining price stability. Earlier this month, the ECB revised its inflation forecasts lower, now expecting inflation in the 20-nation eurozone to hit 2.0% in 2025 and ease further to 1.6% the following year.

Lagarde also commented on the progress of the ECB's digital euro project. She indicated that preparations are advancing, and if lawmakers grant their approval, the initiative would be ready to move forward. The potential launch of a digital currency underscores the ECB’s broader push to modernise Europe’s financial infrastructure amid evolving economic and technological landscapes.

(EUR/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the EUR/USD currency pair has been in a bullish trend since January 2025, as indicated by the formation of higher highs and higher lows. It is currently retesting the resistance zone of 1.1530 – 1.1570. If the price breaks and closes firmly above this zone, it may potentially continue its bullish momentum and move higher. Conversely, if bearish pressure holds and prevents a breakout, the pair could potentially move lower.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.