No major move for Gold as strengthening US dollar on Middle East tensions caps price

Traders Union
All News
Financial News
Gold rises 0.89% today on tensions

Highlights

Escalating US-Iran military tensions in the Persian Gulf are increasing geopolitical risk, shifting investor flows toward the dollar and oil at the expense of gold.
Fed officials’ hawkish rate stance and rising oil-driven inflation reinforce a subdued outlook for gold demand amid safe haven reallocation.
Gold trades below major moving averages with persistent bearish momentum; expected to consolidate between $4,530 and $4,620 with a greater downside risk.

Safe-haven flows shift as military tensions and Fed stance weigh on gold

Intensifying military clashes between the US and Iran in the Persian Gulf have heightened geopolitical tensions, driving investors to reassess safe haven strategies and favoring the US dollar and oil over gold. As oil prices rise and inflation expectations increase, the market faces a renewed focus on potential energy supply disruptions and more persistent inflation, both of which influence asset flows away from non-yielding assets like gold. Recent statements from Federal Reserve officials reinforcing elevated interest rate expectations further constrain gold’s appeal in the current environment, cementing a cautious outlook for demand.

Bearish momentum persists as gold tests oversold indicators and support

On the technical front, gold trades below the SMA-20 ($4,704.85), SMA-50 ($4,687.60), and just under the SMA-200 ($4,567.05), with immediate support seen at the Ichimoku Kijun level of $2,442.00. Momentum indicators on the daily chart remain negative as both MACD and ADX signal selling pressure. However, Stoch RSI and Bull/Bear Power readings show oversold conditions, hinting at seller exhaustion. The RSI stands at 35.71, indicating a lingering sell bias, while the CCI is neutral. The Awesome Oscillator also remains negative, confirming bearish momentum persists even as some intraday strength appears toward session highs.

Sideways trade likely as low breakout odds favor downside risk

Over the next five trading days, gold is likely to consolidate within a typical volatility band of $4,530 to $4,620 relative to current levels. The probability of a sustained upside breakout is low (less than 20%), with downside risk prevailing if bearish momentum persists and buyers remain sidelined. The base case scenario is for price to move sideways within this band, while a bullish reversal would require a decisive move above $4,620. Conversely, a dip below $4,530 could accelerate further selling if negative momentum continues.

Viktoras Karapetjanc, senior analyst at Traders Union, sees recent geopolitical tensions and shifting macro dynamics as the main drivers behind gold’s current weakness. He believes that persistent Middle East conflicts and stronger US dollar flows have limited gold’s traditional safe haven appeal, even as technicals show oversold signals. Momentum remains bearish, but consolidation near key support could spark interest if global sentiment shifts. Karapetjanc remains cautiously optimistic that gold could stabilize in the short term. "If gold holds above $4,530 this week, we could see renewed buying interest should risk trends or inflation fears intensify," he says.

Earlier, analysts noted that persistent bearish momentum in gold was driven by technical weakness and shifting safe haven demand amid geopolitical uncertainty. The latest developments reinforce this cautious outlook, suggesting traders should closely monitor for any momentum shift at resistance near $4,620 as a signal for potential trend reversal.

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

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.