Critical warning for gold: Will it continue its rise?

Gold is testing historic highs as demand for safe-haven assets increases in global markets. In particular, former US President Donald Trump’s attacks on Yemen and his harsh statements regarding Iran have unsettled markets, further increasing the demand for gold.

Economist Dr. Filiz Eryılmaz evaluated the latest developments in the gold market. Stating that record levels could be seen in both ounce and gram gold following Trump's moves, Eryılmaz warned investors to be cautious.

Speaking to Sözcü TV, Dr. Filiz Eryılmaz made the following assessments:

"Trump’s statements regarding Iran and his attacks on Yemen have disturbed the markets. Had these developments not occurred, we might have seen a slight correction in gold prices. However, the upward pressure on gold currently continues."

Drawing attention to the Fed meeting to be held on Wednesday, Eryılmaz said, "The Fed will keep interest rates steady, but we will be facing a strong and hawkish Fed. Statements to be made regarding inflation, growth, and interest rate expectations could give gold more strength."

THE 3 THOUSAND DOLLAR LEVEL IS CRITICAL

Stating that gold could continue its rise in the short term, Eryılmaz gave important warnings to investors:

"It may be risky to make short-term purchases with large amounts of money thinking that gold will rise even further. In particular, we need to see a few days of closing above the 3 thousand dollar level for ounce gold. It is also beneficial not to act hastily in gram gold without seeing a few days of closing above 3 thousand 500 liras."

Eryılmaz stated that depending on the course of developments, ounce gold could rapidly rise to 3 thousand 60 dollars, but if it falls below 2 thousand 978 dollars, the possibility of a decline would come into play.

WHAT WILL THE FED DECISION BE?

Another important development that markets are focused on is the Fed interest rate decision to be announced on Wednesday, March 19. The Fed is expected to keep interest rates steady at the 4.50 percent level. As it will be recalled, the Fed last cut interest rates by 25 basis points in December 2024, lowering them from 4.75 percent to 4.50 percent. However, it is stated that the messages Fed Chair Jerome Powell will give in his statements could be influential in the gold market.

Dr. Eryılmaz said that in addition to the Fed's interest rate decision, the hawkish tone in the decision text and Powell's statements would be important for the markets.

On the last trading day of last week, ounce gold exceeded 3 thousand dollars, seeing its highest level of the year. Carrying this upward trend into the new week, gold continues to bring a smile to its investors. In light of global developments, fluctuations in gold prices are expected to continue for some time.