On May 6, 2025, gold prices surged sharply, with spot gold in New York trading at $3,432.50 per ounce in the afternoon session—up $99.10 on the day, a gain of 2.97%, marking a new multi-week high. Intraday prices ranged between $3,322.50 and $3,437.20 as buying momentum picked up, driven by escalating geopolitical tensions, uncertainty surrounding U.S. Federal Reserve policy, and a weaker U.S. dollar.

Heightened risk aversion in the market is rooted in growing instability in the Middle East and Eastern Europe. Tensions between Israel and Yemen’s Houthi forces have intensified, with the Houthis threatening a full blockade of Israeli airports, further rattling the region. Meanwhile, the war in Ukraine remains at a stalemate. Although the Kremlin claims to be ready for negotiations, no tangible progress has been made.

Adding to the anxiety, while recent U.S. employment data came in stronger than expected, investors remain unsure about the Fed’s policy outlook following this week’s meeting. Hopes for a rate cut in June have noticeably weakened. Still, the U.S. dollar index slid 0.6% over the past day, suggesting a shift toward safe-haven assets like gold amid growing uncertainty.

Long-term demand from central banks continues to lend support. So far this year, several have increased their gold reserves—especially in emerging markets—as a strategy to diversify national holdings. Gold prices have climbed 26% year-to-date, cementing the metal’s role both as a hedge against inflation and a safe haven in turbulent markets.

From a technical standpoint, gold has held firm above the $3,242 level, which coincides with its 21-day moving average. If the price can maintain its position above $3,442 in the short term, the next resistance lies at the $3,500 mark. The 14-day RSI currently sits at 55.5, indicating there’s still room for further gains.

Attention now turns to the Federal Reserve’s interest rate decision and Chairman Powell’s remarks scheduled for the evening of May 7. Should the post-meeting tone lean dovish, analysts expect gold to climb even higher. In addition, developments in U.S.–China and U.S.–Japan trade talks, as well as the evolving situation in the Middle East, will likely influence the flow of safe-haven capital and cause renewed movement in gold prices.

On the technical side, support levels are seen at $3,242 and $3,150, while resistance is expected near $3,442 and then at the psychological barrier of $3,500. Traders are advised to closely watch policy signals and geopolitical headlines, adjusting their positions accordingly to navigate potential market volatility.