Gold Near $4,600 as Safe-Haven Demand Meets USD Strength

Key Moments

Gold (XAU/USD) pulls back after touching $4,600, the weekly high reached during Asian trading.
Ceasefire talks between the US and Iran ease inflation fears. However, ongoing tensions still support safe-haven demand.
Markets now expect fewer Fed rate cuts. Some traders even price in a possible hike, which supports the US Dollar.

Gold Pulls Back After Testing $4,600

Gold (XAU/USD) trims gains after rising to $4,600 during Wednesday’s Asian session. That level marks a weekly high. However, the move quickly lost momentum.

Traders remain highly sensitive to geopolitical headlines. As a result, volatility is likely to stay elevated. At the same time, the broader backdrop is mixed. This makes investors cautious about chasing prices higher.

Earlier this week, Gold rebounded strongly from the 200-day Simple Moving Average near $4,100. That level also marked a four-month low. Even so, buyers now want stronger confirmation before adding new positions.

Ceasefire Hopes Ease Inflation Concerns

Diplomatic efforts between the US and Iran are improving sentiment. Reports suggest both sides are working on a temporary one-month ceasefire. This could open the door for broader negotiations.

In addition, US President Donald Trump delayed planned strikes on Iran’s energy infrastructure. He cited ongoing talks as the reason. Furthermore, Iran reportedly offered concessions tied to energy flows through the Strait of Hormuz.

As a result, oil prices have softened. This helps reduce inflation concerns. Consequently, pressure on central banks to stay aggressive also eases.

Because Gold does not pay interest, it often benefits when rate expectations fall. Therefore, the metal has attracted some buying interest for a second straight day.

Ongoing Conflict Keeps Markets on Edge

Despite diplomatic progress, the conflict continues. Israel maintains strikes, while the US is increasing its military presence in the region.

For example, thousands of troops from the 82nd Airborne Division have been deployed. Meanwhile, Iran has launched new missile attacks. Gulf nations have also intercepted drones and missiles.

Because of this, market sentiment remains fragile. Oil prices stay supported, which keeps inflation risks alive. In turn, this limits how far Gold can fall.

So, while higher yields weigh on Gold, safe-haven demand still provides support.

Stronger Fed Outlook Supports the US Dollar

Monetary policy expectations are shifting. Traders now see little chance of additional rate cuts.

Instead, some expect a rate hike later this year. This more hawkish outlook supports the US Dollar. As a result, Gold faces headwinds.

Because of these mixed signals, investors want confirmation before calling a bottom. Until then, many prefer to stay cautious.

Key Technical Levels for XAU/USD

Technically, Gold shows early signs of strength. A move above the 100-hour Simple Moving Average is a positive signal. However, the rally stalled near the 38.2% Fibonacci retracement.

Momentum indicators remain supportive. The MACD is in positive territory, and the signal line is trending higher. At the same time, the RSI sits in the high 60s. This suggests strong, but not overbought, conditions.

Level	Type	Comment
$4,637	Upside target	Next level if price breaks clearly above $4,600
Mid-$4,750	Upside target	Area where the broader rebound may stall
$4,600	Resistance	Key barrier that must break for further gains
$4,470	Support	First level buyers are watching
$4,401	Support	Important Fibonacci and consolidation zone
$4,250–$4,300	Support zone	Deeper pullback area
$4,100	Major support	200-day SMA and recent low

If Gold breaks above $4,600, momentum could accelerate toward $4,637. After that, the mid-$4,750 area becomes the next target.

On the downside, $4,470 is the first support. Below that, $4,401 becomes critical. A break under this level could trigger a deeper pullback toward $4,250–$4,300.

However, holding above support keeps the short-term uptrend intact.

How Fed Policy Impacts the US Dollar

The Federal Reserve controls monetary policy in the United States. Its main goals are stable prices and strong employment.

When inflation rises above 2%, the Fed increases interest rates. This makes borrowing more expensive. It also supports the US Dollar.

On the other hand, when inflation falls or growth slows, the Fed cuts rates. This supports the economy but usually weakens the Dollar.

QE and QT: Why They Matter

In extreme conditions, the Fed uses additional tools. One example is Quantitative Easing (QE). Under QE, the Fed buys bonds to inject liquidity into the system.

This increases money supply and usually weakens the US Dollar.

In contrast, Quantitative Tightening (QT) reduces liquidity. The Fed allows bonds to mature without replacing them. As a result, the Dollar tends to strengthen.