Gold: Geopolitical tensions and central bank buying drive brief surge then retracement

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Gold drops 3.55% to $5,141 today

Highlights

Gold (XAU/USD) surged past $5,400 per troy ounce on March 2, 2026, following Operation Epic Fury and the closure of the Strait of Hormuz, driven by intensified geopolitical tensions and safe-haven demand.
Central banks in China, India, and Turkey accelerated gold reserve accumulation during market volatility, supporting ongoing demand as gold pulled back toward $5,180 amid profit-taking on March 3.
Technically, gold trades at $5,141.50, above key supports (MA-20 at $5,120.67, Ichimoku Kijun at $5,036.34) with a high probability (>80%) of short-term consolidation between $5,040 and $5,240.

Safe-haven demand surges as Middle East conflict escalates

On Monday, March 2, 2026, the price of gold (XAU/USD) broke through $5,400 per troy ounce, reaching an intraday peak of $5,419.32 amid heightened geopolitical tensions following the closure of the Strait of Hormuz after Operation Epic Fury. This surge was driven by safe-haven demand as the conflict in the Middle East intensified, causing central bank gold buying to accelerate and global risk aversion to increase. As of Tuesday, March 3, 2026, gold has faced profit-taking pressure, pulling back toward $5,180 after four consecutive days of gains, but remains highly responsive to ongoing geopolitical instability. Recent reports also highlight that central banks from countries such as China, India, and Turkey continue expanding their gold reserves, further supporting demand for XAU/USD during global uncertainty.

Mixed momentum signals as intraday weakness follows early volatility

Momentum signals are mixed: the daily MACD remains in buy territory, but the ADX on D1 is neutral at low levels, suggesting weak trend strength. Multiple oscillators (RSI, Stochastic RSI, CCI, Bull/Bear Power) show overbought conditions or buyer dominance on higher timeframes, but intraday and short-term signals reveal a shift — Bull/Bear Power and Stochastic RSI point to an oversold, seller-controlled session, matched by a daily drop of $189.45 or 3.55% after a clear gap up at the open. The current price is near today’s low, indicating pressure after the open with high intraday volatility. Diverging oscillator and momentum readings — intraday weakness against higher timeframe bullishness — imply a short-term pause or retracement within an elevated trend.

Sideways consolidation likely as upside probability remains high

For the next 5 trading days, the expected range is $5,040 to $5,240, calibrated to reflect current price dynamics and recent volatility. The probability of a price increase is very high (more than 80%), while the likelihood of a decline is very low. The baseline scenario sees gold consolidating sideways around current levels. A bullish scenario could emerge if the price reclaims ground above the recent peak, targeting resistance near $5,240, while a bearish break below $5,040 support would open the way to a deeper pullback toward $5,000, though this remains less likely given the prevailing strong longer-term momentum.

Viktoras Karapetjanc, analyst at Traders Union, sees gold firmly supported by persistent central bank demand and ongoing geopolitical risks. He believes the recent pullback is technical in nature, while the broader macro and sentiment backdrop remain highly favorable. Trend strength is mixed short term, but medium- and long-term momentum are undisturbed. Consolidation above $5,040 is expected to attract buyers and keep the bullish tone intact. "I see strong institutional flows and safe-haven buying as key pillars for gold, so I expect upward pressure to resume soon."

Previously it was reported that gold is exhibiting robust bullish momentum, trading well above key moving averages, with technical indicators such as MACD and trend oscillators supporting continued upside despite several overbought signals including high RSI and Stochastic readings. Current support is seen above recent moving averages and Ichimoku levels, while resistance is developing near the upper end of the range, suggesting further consolidation amid elevated volatility.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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