Gold prices fell over 4% from their all-time high of $4,555, finding support around $4,300. This drop was caused by low trading volumes and rising geopolitical tensions, particularly Russia’s changing stance on peace discussions with Ukraine. China increased military exercises near Taiwan, and potential US actions regarding Iran’s nuclear program also affected market sentiment. These geopolitical events have influenced the US Dollar and precious metals, alongside insights from the Federal Reserve’s meeting minutes, which helped shape economic discussions.

Gold’s Technical Analysis

Technical analysis shows that gold is stabilizing after rebounding from the $4,300 level. Indicators like the MACD and RSI point to a steadiness in momentum. Resistance is seen around $4,440, while support lies at various Fibonacci retracement levels, as prices respond to ongoing market conditions. Gold is valued as a safe-haven asset and a way to protect against inflation and currency decline. Central banks—especially in emerging markets—are significant buyers, purchasing 1,136 tonnes of gold in 2022. Its price is affected by geopolitical unrest, interest rates, and the behavior of the US Dollar. After a sharp 4% drop on Monday, followed by a rebound, we’re noticing increased volatility, which may continue in the coming weeks. The bounce from $4,300 relates closely to rising geopolitical risks, particularly involving Russia, China, and Iran, which provide solid support for safe-haven assets. This suggests that any price dips are likely to attract strong buying interest as long as global uncertainties remain. The Federal Reserve’s meeting minutes, which are expected later today, are being closely watched. Recent US CPI data for November 2025 shows core inflation stubbornly exceeding 3.5%. The market is eager for hints about the Fed’s plans for 2026. A more dovish tone could weaken the dollar and help gold break through resistance levels, while a hawkish stance might push prices back towards Monday’s lows. For traders using options, the high uncertainty creates opportunities for strategies like long straddles or strangles. Implied volatility surged after Monday’s price movement, and significant price fluctuations could follow the Fed minutes or a major geopolitical development, justifying the higher costs. These strategies are aimed at capitalizing on potential big shifts, regardless of direction.

Central Banks And Historical Context

We should acknowledge the strong ongoing demand from central banks, which supports the long-term bullish outlook for gold. The World Gold Council’s latest data indicates that central banks bought over 350 tonnes in Q3 of 2025, marking the strongest quarter since the record purchases in 2022. This consistent buying, especially from emerging market banks, creates a solid fundamental base that limits steep price declines. From a technical perspective, watch the support zone around $4,300 and the significant resistance near $4,440. A sustained move above this resistance could lead gold back to all-time highs, while failing to hold $4,300 might trigger a swift drop towards $4,265. We might consider selling put options near the lower support or buying call options if resistance is decisively broken. Looking back, we see similarities between today’s situation and the period after the 2008 financial crisis, where ongoing central bank buying and economic uncertainty fueled a multi-year gold bull market. The trend of de-dollarization and geopolitical fragmentation in recent years has further reinforced gold’s role as a primary reserve asset. This historical context suggests that current market volatility is likely a consolidation phase within a larger upward trend. Create your live VT Markets account and start trading now.

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