Gold rises on safe-haven demand amid geopolitical tensions, USD strength limits upside
- Gold attracts fresh buyers as geopolitical tensions continue to underpin safe-haven assets.
- The USD retains its status as the global reserve currency and might cap the precious metal.
- Traders now look to US macro data, though the focus remains on geopolitical developments.
Gold (XAU/USD) is seen building on the previous day’s bounce from levels below the $5,000 psychological mark, or over a one-week low, and gaining positive traction during the Asian session on Wednesday. Investors remain concerned about a prolonged conflict in the Middle East and its impact on the global economy amid an already uncertain environment. In fact, US President Donald Trump said that the US military operation in Iran could take four to five weeks, and more strikes would continue for as long as necessary. This continues to weigh on investors’ sentiment, which is evident from a generally weaker tone around the equity markets and underpins demand for the safe-haven bullion.
Meanwhile, the closure of the Strait of Hormuz – one of the world’s most critical energy chokepoints – led to the recent surge in Crude Oil prices to the highest level since June 2025. Moreover, Iran has targeted infrastructure critical to the world’s energy production as part of its retaliation and warned that it will not allow a single drop of oil to leave the region. This has raised fears of a fresh energy crisis that could ramp up inflation and force the US Federal Reserve (Fed) to slow or scale back its plan to cut interest rates further. The outlook, in turn, assists the US Dollar (USD) to retain its dominant reserve currency status and might cap the non-yielding Gold, warranting caution for bullish traders.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, remains close to the highest level in over three months and keeps a lid on the commodity. Hence, it will be prudent to wait for a sustained strength and acceptance above the $5,200 mark before the XAU/USD bulls start positioning for any further intraday appreciating move. Traders now look forward to the US economic docket – featuring the release of the ADP report on private-sector employment and ISM Services PMI. The data might do little to provide any meaningful impetus to the buck or the Gold price, as the focus remains glued to developments surrounding the ongoing US-Israel-Iran war.
XAU/USD 4-hour chart
Gold defends a confluence support comprising the 200-SMA H4 and the lower end of an ascending channel
The near-term bias turns cautiously bearish after the Gold price slipped back from the upper boundary of the ascending channel that has guided gains since early February, now trading just above the channel’s lower band near $5,025. The Relative Strength Index (14) recovers toward 43 after briefly approaching oversold territory, which suggests fading but still-present downside momentum. The Moving Average Convergence Divergence (MACD) line holds below its signal line and has retreated toward the zero line, reinforcing a loss of bullish conviction after the rejection above $5,380.
The XAU/USD pair trades only marginally above the rising 200-period Simple Moving Average (SMA) on the 4-hour chart around $5,030, indicating that the broader uptrend remains intact but under pressure in the short term. Initial support emerges in the $5,140–$5,130 band, with a break lower exposing the 200-period SMA and channel floor clustered around $5,030, followed by a deeper cushion near $4,980.
On the upside, immediate resistance stands near $5,210, where recent intraday rebounds stalled, followed by $5,260 and then the recent swing area around $5,320. A sustained recovery above $5,260 would ease the current bearish tone and open the way back toward the $5,380 region, while failure to defend $5,030 would signal a more decisive corrective phase within the broader ascending structure.
