On Wednesday it once again surpassed the key level of $5,000 an ounce and has already approached $5,067. The precious metal continues to grow after jumping more than 6% in the previous session, marking the largest daily increase since 2008. Quotes were supported by buying after a decline following a sharp correction at the beginning of the week.
Geopolitical risks gave an additional boost to the precious metal. After US forces shot down an Iranian drone near an aircraft carrier in the Arabian Sea, demand for defensive assets intensified. At the same time, President Donald Trump affirmed that diplomatic contacts continue and the White House confirmed talks between the United States and Iran scheduled for Friday.
Expectations of quick rate cuts by the Federal Reserve have diminished somewhat since the appointment of Kevin Warsh as chairman of the Federal Reserve. However, markets are still pricing in two rate cuts: likely mid-year and later in 2026.
On the other hand, it is noted that the publication of key US labor market statistics, including the monthly employment report, will be postponed due to the partial government shutdown. The House voted Tuesday on the interim budget approved by the Senate.
Technical analysis
On the H4 chart of , after completing a powerful uptrend and reaching a high around 5600, the market entered a sharp correction. The decline was impulsive, as evidenced by the expansion of the Bollinger Bands, a panic selling signal. The minimum was recorded in the 4440-4450 zone, from where the technical rebound began. Current prices are recovering but remain below the Bollinger midline. The structure remains corrective, with greater volatility and predominance of downside risks.
On the H1 chart, after a sweeping downward movement, a base and a sequence of higher lows have formed: local stabilization. The price is trading in a narrow ascending channel and gradually moving towards the 5050-5100 resistance zone. However, the recovery appears technical. As long as the quotes are below the key resistance and the midline of the upper time frame, the rebound will remain vulnerable to a resumption of selling.
Conclusion
In short, gold's strong rally is primarily a technical rebound from oversold conditions, supercharged by a sudden burst of geopolitical tensions. While the move is significant, the technical structure across the time frames suggests it remains a corrective bounce within a broader downtrend, not a confirmed reversal. The rally is vulnerable as long as prices trade below key resistance on a higher time frame. The fundamental picture remains mixed, with delayed US data creating uncertainty and revised but still present Fed easing expectations providing a floor. The near-term direction will depend on the evolution of Middle East diplomacy and gold's ability to overcome critical technical limits.
By RoboForex Analysis Department
Disclaimer:
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
