Insights 
VT 
Gold Market Update
Gold (XAU/USD) is seeing a dip, trading near $3,368, down from Monday’s high of $3,452. This comes in the context of a stronger US Dollar and solid Treasury yields hampering its short-term appeal.
An annual central bank survey by the World Gold Council has shown rising interest in Gold accumulation. Of the 73 participants, 95% expect global Gold reserves to increase in the next year, with over 40% planning to boost their own holdings.
Major central banks have delivered cautious monetary updates, suggesting prolonged interest rates. However, near-term Gold price pullback is influenced by reduced Fed rate-cut expectations, strengthening the US Dollar.
Iran’s enriched uranium stockpile is causing global concern, and geopolitical tensions are high. The situation could impact the Strait of Hormuz, affecting global Oil flows and inflationary pressures.
Technically, Gold faces resistance at $3,371 and $3,400, with support levels at $3,350 and $3,318. The move reflects a broader Fibonacci retracement, with a declining RSI indicating reduced buying pressure.
Impact of Geopolitical and Economic Factors
Gold, known as a safe-haven asset, is highly sought after during geopolitical instability or recession fears. Its performance is inversely linked to the US Dollar and interest rates.
Given the recent slide in Gold from Monday’s peak to levels near $3,368, the attentive trader should take a step back and review what is shifting sentiment beneath the surface. As Treasury yields stay elevated and the greenback finds further strength, it’s becoming difficult for bullion to maintain upward momentum. That bump in the Dollar, driven largely by tempered appetite for rate cuts from the Federal Reserve, is pressing hard on metal prices. Any pricing model that still anticipated easing within the next quarter might need a quick rethink.
We’ve seen strong signals from high-level policymakers indicating that borrowing costs will remain elevated for an extended period. This is less about guessing where rates ‘might’ land and more about parsing each statement for actual commitment to keeping inflation below target. In effect, this means that speculative positions in interest-sensitive assets—like bullion—may face more short-term downside risk than some had allowed for.
However, longer-term accumulation patterns present a contrasting layer. The recent World Gold Council survey reveals clear buying intentions among sovereign institutions. A full 95% of respondents anticipate growing global reserves, and nearly half are actively planning to expand their own holdings. This demand, anchored in real, not speculative, interest may act as a floor in the coming weeks—even if upward price extension remains on pause. For those tracking capital flows or futures market open interest, this institutional behaviour could serve as a backstop, albeit a gradual one.
In the background, unrelenting geopolitical instability persists. Iran’s nuclear progress, especially the climb in enriched uranium levels, is fuelling worries across global markets. The fact that the Strait of Hormuz could face disruption adds another layer of concern. If crude shipments through the region were compromised, ripple effects would likely be immediate, including sharp moves in Oil as well as inflation-sensitive assets. These are not theoretical threats—they carry direct consequences for macro hedging strategies, especially where inflation hedges are actively modelled.
From a technical viewpoint, resistance seems stacked between $3,371 and $3,400, while support is positioned near $3,350, with deeper levels toward $3,318. These price markers align cleanly with Fibonacci retracement levels traced from the recent high, lending extra relevance to them. Meanwhile, the RSI suggests a waning willingness to chase prices higher, which backs a cautious stance on new long positions in the very near term.
For exposure strategies, we are likely to see better timing play come from fading rallies near resistance until yields find a top or the Dollar takes a breather. The ‘safe-haven’ narrative will always hold weight during geopolitical escalations, but it’s interest rates and USD movements that remain the drivers for now. Nimble positioning and a close eye on terminal rate pricing may offer better insight than reacting to headlines alone.
We would monitor real yields as well, particularly the long end of the curve. As they remain positive and well-bid, it’s limiting upside enthusiasm. This doesn’t suggest reversal, just that it’s harder to justify aggressive long stances unless additional catalysts emerge—either via deeper conflict risk or outright dovish pivot. Otherwise, rallies might be short-lived, and reaction-based trades may outperform broader trend-following tactics in the near term.
