Energy Shock Reshapes Safe-Haven Landscape: Dollar Benefits, Gold Faces Short-Term Pressure

Summary:

The Middle East conflict is driving up oil prices and reinforcing expectations of higher interest rates, while a stronger U.S. dollar is weighing on gold. Short-term focus is on the support zone between US$5,060 and US$5,000.

BUY XAUUSD

EXP

TRADING

5183.58

Entry Price

5700.00

4825.00

5177.11 -14.69 -0.28%

0.0

Pips

Flat

4825.00

Exit Price

5183.58

Entry Price

5700.00

Fundamentals

Historical experience shows that when geopolitical risks surge sharply, capital typically flows into both the U.S. dollar and gold simultaneously, as investors tend to hedge against uncertainty through safe-haven assets. However, the structural characteristics of this round of conflict have caused safe-haven demand to flow more distinctly toward the dollar, thereby exerting some short-term pressure on gold, which also possesses safe-haven attributes.

The conflict has severely disrupted energy shipments through the Strait of Hormuz. As one of the world's most critical oil transport routes, any disruption in this region often rapidly impacts global energy supplies. The resulting supply concerns have pushed West Texas Intermediate crude oil prices above US$100 per barrel, injecting fresh inflationary pressures into the global economy. The surge in energy prices typically propagates swiftly through the production chain: increased transportation costs, higher input expenses for manufacturing, and rising end-consumer prices can all intensify inflation expectations.

Against this backdrop, the market's prior expectations of imminent monetary policy easing began to unravel. Investors reassessed the likelihood of interest rates remaining elevated for a longer period, and such shifts in expectations often provide support for the U.S. dollar.

The strong performance of gold over the past two years has largely benefited from declining real interest rates driven by global central bank easing policies. When real yields retreat, the opportunity cost of holding non-interest-bearing assets like gold decreases, thereby enhancing their appeal. However, if inflation resurges and pushes interest rate expectations higher, this macroeconomic environment could undergo a temporary reversal.

Earlier this week, as the Middle East conflict entered its second week with no clear signs of easing, U.S. Treasury yields rose across the board, putting pressure on gold prices. However, gold currently shows some support above US$5,060, with this area potentially providing a foundation for a subsequent rebound. Yet the key support level below warrants attention: a break below the US$5,000 psychological threshold could trigger a wave of stop-loss orders, accelerating the decline toward the US$4,800 range.

Energy Shock Reshapes Safe-Haven Landscape: Dollar Benefits, Gold Faces Short-Term Pressure_1

Technical Analysis

From a structural perspective, the current price movement of gold remains within the bearish “head and shoulders” pattern formed since February 18. However, when viewed on a higher timeframe, this correction may still represent only a temporary pullback within the long-term upward trend.

Therefore, the market's core assessment hinges on whether key price levels are effectively breached. The US$5,252 mark currently serves as the short-term dividing line between bullish and bearish sentiment. Until this level is decisively broken, the market is more likely to maintain a range-bound consolidation pattern. Trading strategies should focus on short-term positioning around this critical price point, employing a buy-low-sell-high approach.

Trading Recommendations

Trading Direction: Buy

Entry Price: 5100

Target Price: 5700

Stop Loss: 4825

Valid Until: April 9, 2026 23:55:00

Support: 5124, 5070, 5014

Resistance: 5205, 5178, 5252

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