Gold extended its weekly advance, with XAU/USD trading near $4,160 and last quoted at $4,144 after comments from US President Donald Trump about intensifying attacks on Iran, including threats against bridges and power plants. The move generated fresh safe-haven demand, while the US Dollar ceded earlier gains. Price action left the pair pressing its intraday high at $4,165, with attention on resistance at $4,200, while immediate support sits around $4,100 ahead of the $4,070 area.
In the UK, ONS data showed CPI rising 2.6% year on year in June, easing from 2.8% in May; core CPI held at 2.6%, above the 2.5% forecast. Elsewhere, Canada and New Zealand printed above expectations. On the charts, XAU/USD is above the 20-period SMA at $4,060.38, the 100-period SMA at $4,074.44 and the 200-period SMA at $4,124.41, with RSI at 66; however, the daily setup remains capped below the 200-day SMA at $4,496.16 and the 100-day SMA at $4,501.34, while the 20-day SMA stands at $4,069.95 and RSI reads 51. A deeper pullback would bring $4,000 into view.
Middle East Geopolitics and Gold Outlook
As geopolitical tensions flare up in the Middle East, we believe derivative traders should position themselves for continued upward momentum in gold (XAU/USD) over the coming weeks. With the precious metal currently trading around $4,144, the immediate target for buyers is the psychological resistance level of $4,200. Given that the Strait of Hormuz historically handles roughly 20% of the world’s daily petroleum liquid transit, any potential military disruption will likely send safe-haven demand soaring.
Options Strategies and Risk Management
For short-term options traders, we recommend looking at bull call spreads with strike prices targeting $4,200 for expiration in mid-August. The technical setup on the four-hour chart supports this bullish bias, as the price remains comfortably above the dense support band between $4,060 and $4,124. However, we must remain cautious because the daily chart’s 200-day Simple Moving Average sits much higher at $4,496, indicating this bounce is a near-term recovery within a larger corrective phase.
While easing consumer price index data in the US and the UK (which recently cooled to 2.6% in June) reduces the risk of aggressive interest rate hikes, energy-driven inflation remains a persistent threat. To protect capital against sudden market reversals, we advise placing tight sell-stop orders just below the immediate support level of $4,100. If the price slips below the $4,070 congestion zone, the short-term bullish thesis will be invalidated, prompting us to prepare for a deeper test of the critical $4,000 floor.
