Rising Geopolitical Risks Reinforce Safe-Haven Demand; Gold Remains on Track to Revisit $4,700 in the Medium Term

Summary:

Renewed escalation in the Middle East has boosted safe-haven demand, while surging oil prices have intensified inflation concerns, reinforcing expectations that the Federal Reserve will maintain elevated interest rates or even tighten policy further. In the near term, gold is likely to remain caught between safe-haven inflows and higher-rate expectations, resulting in continued range-bound trading at elevated levels. However, as long as the key support around $4,100 holds, the medium- to long-term bullish structure remains intact, leaving the metal well positioned to challenge the $4,700 level once again.

BUY XAUUSD

Close Time

CLOSED

4125.09

Entry Price

4700.00

3950.00

4102.32 -21.08 -0.51%

31.8

Pips

Profit

3950.00

4128.27

Exit Price

4125.09

Entry Price

4700.00

Fundamentals

Gold staged a technical rebound after three consecutive days of declines, successfully holding above the $4,100 psychological level. However, the market narrative has shifted from a pure safe-haven trade to a tug-of-war between geopolitical demand and expectations for higher interest rates, limiting the strength of the rebound.

Tensions between the United States and Iran have escalated once again. The U.S. announced a new round of military strikes against Iran while reaffirming its commitment to keeping the Strait of Hormuz open to global shipping. In response, Iran launched retaliatory attacks against Kuwait and Bahrain, sharply increasing geopolitical risks across the Middle East. As a result, crude oil prices surged as markets repriced the risk premium associated with potential disruptions to regional energy supplies.

For gold, however, escalating geopolitical tensions are not an entirely bullish development. Higher oil prices raise the risk of renewed global inflationary pressures, prompting investors to reassess expectations that major central banks, particularly the Federal Reserve, may keep interest rates elevated for longer or even deliver another rate hike. Markets have begun pricing in the possibility of an additional Fed rate increase in the first quarter of next year, pushing Treasury yields and the U.S. dollar higher and weighing on non-yielding assets such as gold.

Meanwhile, the temporary ceasefire arrangement previously reached between the U.S. and Iran remains fragile, leaving room for further escalation. Should geopolitical tensions continue to intensify, safe-haven demand could provide renewed support for gold. Conversely, if markets focus more on persistent inflation and a higher-for-longer interest rate environment, gold is likely to remain volatile in the short term.

Rising Geopolitical Risks Reinforce Safe-Haven Demand; Gold Remains on Track to Revisit $4,700 in the Medium Term_1

Technical Analysis

From a technical perspective, gold has attracted strong buying interest around the $4,100 area, which serves not only as an important psychological threshold but also as a key support level preserving the medium-term uptrend.

Initial resistance is located near $4,135, where the 20-day moving average converges with the middle Bollinger Band. A decisive break above this zone would likely pave the way for a move toward the $4,200 psychological barrier, followed by the upper Bollinger Band near $4,326 as the next major resistance.

Overall, gold continues to trade within a medium- to long-term bullish structure. The recent pullback appears to be a technical correction within the broader uptrend rather than the beginning of a trend reversal. As long as support around $4,100 remains intact, the broader bullish outlook is expected to resume, with the potential to advance toward the $4,700 target.

Trading Recommendation

Trading Direction: Buy

Entry Price: 4,100

Target Price: 4,700

Stop Loss: 3,950

Valid Until: 2026-08-08 23:55

Support Levels: 4,090 / 4,040 / 4,022

Resistance Levels: 4,135 / 4,200 / 4,326

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