Gold rose on Wednesday after falling to a near two-week low of $4,842 on Tuesday. It traded near $4,952, up almost 1.50% on the day, as buyers stepped in after the dip.
Moves were limited as geopolitical tensions eased and the US Dollar stayed firm. US-Iran talks in Geneva reported a “general agreement on a set of guiding principles”, with Iranian negotiators expected to return in two weeks with proposals.
Dollar Support And Fed Outlook
The US Dollar was supported by resilient US labour market data, which reduced expectations of an early Federal Reserve rate cut. Fed Governor Michael Barr said rates should stay unchanged for some time until inflation moves towards the 2% target, while Chicago Fed President Austan Goolsbee said cuts could still be possible this year if inflation continues to ease.
US Durable Goods Orders fell 1.4% in December versus 2.0% expected, after a 5.4% rise in November. Excluding Transportation, orders rose 0.9% after 0.5% previously.
Markets next watch January Industrial Production and FOMC minutes, then US Q4 GDP and the Core PCE Price Index. On the 4-hour chart, price is below the 100-period SMA at $5,011.07 and above the 200 SMA at $4,838.85, with RSI (14) at 43 and ATR (14) at 52.01.
Given the market on February 18, 2026, we see gold in a tight spot, making range-bound strategies attractive in the immediate term. With strong support demonstrated by buyers near $4,842 and significant resistance capping gains around the $5,000 mark, selling cash-secured puts below support or selling covered calls against resistance could generate income. This reflects the current market indecision as traders await clearer signals.
Positioning For Near Term Volatility
The firm US Dollar is putting a lid on gold’s upward momentum, suggesting a cautious or hedged approach is wise. We note the US Dollar Index has maintained strength above the 104 level for several weeks, a trend reinforced by a resilient labor market that saw over 200,000 jobs added last month. For traders anticipating further dollar strength, buying short-dated put options on gold could serve as an effective hedge against a drop below the $4,800 level.
However, the bigger picture still favors an eventual move higher, supported by expectations of a Federal Reserve pivot later this year. We saw how central banks added a net 800 metric tonnes to official gold reserves in 2025, and this underlying demand provides a solid price floor. Therefore, we should view any significant dips toward the $4,800 support level as opportunities to purchase call options dated for the second half of the year.
Volatility is the key factor to watch over the next two weeks, especially with the FOMC minutes and PCE inflation data on the horizon. With gold’s implied volatility currently near a three-month low, option premiums are relatively inexpensive, making strategies like a long straddle or strangle appealing. Such positions would profit from a large price move in either direction following the data releases, without having to predict the outcome.
The most critical levels to monitor are the moving averages, which will act as triggers for our next moves. A decisive break and close above the $5,011 level would be our signal to add to bullish positions, while a sustained move below $4,838 would confirm that a deeper correction is underway. Until one of these levels is breached, we will trade the range and prepare for the coming volatility.
