Gold (XAU\/USD) has experienced a recent reversal from all-time highs, touching $4,580 before rising past $4,600 during European trading on Thursday. The precious metal is supported by a softer US Dollar, despite easing geopolitical tensions and robust US economic indicators.<\/p>\n
The US President has softened rhetoric against Iran, reducing the likelihood of immediate military action. Gold remains near all-time highs, aided by a US Dollar pullback, along with positive Eurozone and UK data, and cautious Japanese intervention affecting the Yen.<\/p>\n
Currently trading at $4,620, gold faces support at $4,670-$4,680, as bullish momentum fades. Indicators such as the Relative Strength Index (RSI) show bearish divergence, while the MACD suggests diminishing upward drive. Bears aim to break below $4,570 to explore further correction.<\/p>\n
Looking upward, surpassing $4,630 leads to Fibonacci extension targets at $4,689 and $4,763. Historically, gold serves as a store of value and exchange medium, popular during turmoil. Hedging against inflation and currency depreciation, gold remains independent of specific issuers or governments.<\/p>\n
Central banks hold substantial gold reserves to bolster economic stability. In 2022, central banks purchased 1,136 tonnes of gold, marking a record high. Emerging economies are rapidly increasing reserves, highlighting gold’s enduring value as a stable, diversified asset amidst fluctuating US Dollar trends.<\/p>\n
Gold is hovering near its all-time highs around $4,620, but the rally shows signs of exhaustion. While a softer US Dollar offers support, easing geopolitical tensions are removing some of the immediate safe-haven demand. This mixed picture suggests we should prepare for a period of consolidation or a potential correction in the coming weeks.<\/p>\n
We should remember the relentless central bank buying that defined the market through 2024 and 2025, which provides a strong underlying floor for the price. Looking at recent data, the World Gold Council confirmed that central banks globally added over 800 tonnes to reserves last year, continuing the record pace we saw back in 2022 and 2023. This persistent demand, coupled with inflation that has remained above the Fed’s target despite the rate cuts of the past year, limits the potential for a severe price collapse.<\/p>\n
The bearish divergence on the RSI and the MACD crossover are significant warning signs that this rally is running out of steam. For traders anticipating a pullback, purchasing put options with a strike price below the key $4,570 support level could be a viable strategy. A less aggressive approach would be to establish bear call spreads, selling calls near the $4,690 resistance and buying protection further out, to profit if the price stays below this level.<\/p>\n
Given the all-time high prices, those of us with existing long positions should consider hedging our profits against a sharp reversal. Buying protective puts below the current price can lock in gains while still allowing for further upside participation. The current calm could be temporary, so a long straddle, buying both a call and a put, could pay off if we see a significant price swing in either direction.<\/p>\n
We\u2019ve seen this pattern before, particularly during the inflationary period of 2022-2024, where gold initially struggled with rising rates before ultimately pushing higher. The market then correctly anticipated the pivot by central banks toward easing monetary policy in 2025, which fueled the most recent leg of this rally. Therefore, any dip towards the $4,500 level should be seen not as a trend reversal, but likely as a buying opportunity for longer-term positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Gold nears record highs as Dollar softens, bullish momentum fades; central banks boost reserves for stability.<\/p>\n","protected":false},"author":62,"featured_media":16975,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39264","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=39264"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39264\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16975"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=39264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=39264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=39264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}