Gold price rallies over 3% amid Middle East tension and US fiscal uncertainty

Gold price rallies as geopolitical risks and fiscal uncertainty boost safe-haven demand
XAU/USD pushes above $3,310 amid Middle East tensions and Trump’s domestic struggles

Gold (XAU/USD) climbed above $3,310 on Wednesday, rising more than 3% as investors rushed into safe-haven assets amid growing geopolitical instability and uncertainty around U.S. fiscal policy. The rally comes after reports emerged that Israel is seriously considering military strikes on Iranian nuclear sites—a move that could significantly escalate tensions in the Middle East.

According to CNN, the development followed U.S. President Donald Trump’s failed attempt to maintain diplomatic influence over Israeli Prime Minister Benjamin Netanyahu, raising doubts over Trump’s control in the region. Markets reacted quickly, with gold prices breaking out of a tight range on the heightened geopolitical risk.

Back home, Trump faces additional pressure. His administration is struggling to gather enough support in Congress to pass a large-scale tax reform bill. The proposal, known as the "Big Beautiful Bill," has faced resistance particularly over proposed changes to the State and Local Tax (SALT) deduction cap. Lawmakers from high-tax states and fiscal conservatives are pushing back, causing further concern among investors.

The combination of global tension and domestic political gridlock has created fertile ground for gold to rally, though technical resistance may slow its momentum in the near term. Still, with uncertainty growing on multiple fronts, analysts expect safe-haven demand to remain strong.