Gold prices have steadied just below $3,400 per troy ounce after briefly exceeding this level. The ongoing uncertainty in the Middle East is likely to support the metal’s value, but the sharp price increase since the beginning of the year may discourage large purchases. Next week, we expect data on gold deliveries between Hong Kong and China for May, which could showcase April’s strong demand from China. For gold to reach record highs again, we may need to see an escalation in the Middle East, like potential U.S. involvement in Iranian issues. The information presented includes forward-looking statements that come with risks and uncertainties. It is not investment advice, and individuals should conduct their own thorough research before making investment decisions. We do not take responsibility for errors or lack of timely updates and emphasize that investments can result in total loss. Neither the author nor the platform act as registered investment advisors, and this content is not intended as investment guidance. The author has no financial interests or connections with any mentioned companies and has not been compensated by any external parties for this writing. The author will not be liable for any errors, omissions, or damages related to this information. Gold has recently lingered just under the $3,400 mark, reflecting a mix of market hesitation and geopolitical concerns. The significant rise in gold’s value at the start of the year may lead to a temporary pause in prices, not due to lack of demand but as a normal cooling period after a steep increase. We can’t overlook how market positioning can trigger a halt, particularly when new catalysts are needed to reignite the upward trend. Keep an eye on the upcoming trade data between Hong Kong and mainland China. If May’s figures mirror April’s strong demand for gold—likely driven by currency hedging and local uncertainties—demand from the East is still strong. However, this alone may not be enough. For gold to hit its recent highs again, we need to consider additional geopolitical risks. The possibility of Western military involvement in the Gulf region remains a significant, unresolved factor. If the U.S. edges closer to direct conflict with Iran, we could see increased demand for safe-haven assets, not only in physical markets but also in futures and options. Hedgers might respond quickly given current open interest, as there has been little unwinding, indicating that defensiveness remains in portfolios. Right now, we are in a holding pattern. Volatility levels are steady, but there is a slight upward shift in skew—an early sign that some traders are pricing in tail risks for short- to mid-term options. This could lead to more aggressive protective bids, especially in call spreads if traders expect a rise due to new geopolitical developments. Traders in the derivatives market should closely monitor trends in implied versus realized volatility over the next two weeks. Short gamma exposure has been calm but could spike if prices push firmly above key resistance. In contrast, lingering prices may lead to theta burn for those who overpay for premium without strong directional conviction. No significant seasonal downturn is expected, but liquidity will play a crucial role. Watch for volume changes during key regional trading hours, as reactions to news may initially seem exaggerated before settling down. This is particularly relevant when macroeconomic data from Asia coincides with risk events in the United States. Adjust your risk exposure based not only on price movements but also on the timing and likelihood of external catalysts. Being flexible is better than acting too soon. In the short term, rate expectations are not the main drivers; rather, it’s fear and the flight to perceived safety that influence prices more significantly. It is also important to consider how futures curves interact with ETF inventories. Sudden inflows may indicate renewed retail interest rather than institutional rebalancing, which could impact volatility floors and the effectiveness of hedging strategies. While the current narrative focuses on defense and responses to potential escalation, the lack of price retreat suggests ongoing underlying demand. The next two weeks may not clarify the broader macro outlook, but heightened geopolitical tensions might test whether the current support levels are strong enough for another upward movement.

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