Gold (XAU\/USD) fell to about $4,680, its lowest level since early February, after dropping below $4,700. The move was linked to a stronger US Dollar and expectations that US interest rates will stay higher for longer.<\/p>\n
The Federal Reserve\u2019s hawkish stance followed inflation data, including a rise in the Producer Price Index (PPI), plus upgraded economic projections. This reduced expectations for near-term rate cuts and weighed on non-yielding assets such as gold.<\/p>\n
Geopolitical tensions in the Middle East provided some support. Developments involving Iran, Israel and the United States, including attacks on key energy infrastructure, increased demand for safe-haven assets.<\/p>\n
On the 4-hour chart, price moved well below the 50-period and 100-period Simple Moving Averages, which were above $5,050 and $5,120. A descending resistance trend line capped advances near $5,150, while the Relative Strength Index was near 15.<\/p>\n
Resistance was marked around $4,967.00, with further resistance near $5,050. Support was noted at $4,655.28, and a break below it could open a move towards $4,402.23.<\/p>\n
The sharp drop in gold is driven by the Federal Reserve’s firm stance, as we have seen the latest Consumer Price Index report for February 2026 come in at 3.1%, which is still well above the target. The market is now pricing in only one rate cut for this year, which is a significant shift from the three we expected back in January. This makes holding non-yielding gold less attractive compared to interest-bearing assets.<\/p>\n
For traders anticipating further declines, buying put options or establishing short positions in futures contracts could be a primary strategy. The technical charts suggest immediate support at $4,655, with a potential further slide toward the $4,402 level if bearish momentum continues. We should use these levels as near-term targets for any short-side plays.<\/p>\n
However, the ongoing geopolitical risks, particularly the recent escalation of tensions in the Strait of Hormuz, are providing a floor for the price. Any further disruption to energy supplies or direct military confrontation could trigger a flight to safety, causing a sharp rebound in gold. This is the main reason we must remain cautious about being overly bearish.<\/p>\n
Given this uncertainty, a prudent approach involves using options to hedge against a sudden reversal. We are considering buying cheap, out-of-the-money call options to protect short positions from an unexpected price spike. This strategy allows us to maintain a bearish bias while limiting potential losses if the Middle East situation worsens.<\/p>\n
Looking back at 2025, we saw gold trade in a wide range, often getting sold off on hawkish Fed commentary only to be bought back on geopolitical headlines. This pattern is similar to what we observed during the aggressive rate-hike cycle of 2022-2023, where gold\u2019s upside was capped but its downside was cushioned. History suggests this tug-of-war between monetary policy and global risk is likely to continue.<\/p>\n
The level of $4,967 remains the critical pivot point for us in the coming weeks. As long as gold fails to break and hold above this resistance, we should view any rally as a selling opportunity. A sustained move above that price would signal that the bearish pressure is fading and would force us to reconsider our short-term strategies.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Gold sinks to $4,680 on stronger dollar, hawkish Fed; Middle East tensions offer support, key levels watched.<\/p>\n","protected":false},"author":103,"featured_media":16983,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-51813","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\/51813","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\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=51813"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51813\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16983"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=51813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=51813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=51813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}