Gold is currently priced near $4,600 due to expectations that the Federal Reserve will pause interest rate changes, along with easing geopolitical tensions. The price has pulled back from a peak of $4,643, as strong US economic data makes it likely that interest rates will stay the same. The US Producer Price Index and Retail Sales figures surpassed predictions, suggesting steady rates may remain. At the same time, a stronger US dollar is reducing foreign demand for dollar-priced gold, influencing its price.

Geopolitical Influence On Gold

Recent remarks from President Trump regarding Iran have impacted gold’s status as a safe haven. Although US nonfarm payroll numbers were lower than expected, the unemployment rate has improved. On a technical level, gold is currently within an ascending wedge pattern, which may indicate upcoming changes. The recent high serves as resistance, while support is located near the nine-day Exponential Moving Average. Gold’s importance as a store of value and safe-haven asset is driven by factors like inflation, currency decline, and central bank reserves. In 2022, central banks, especially in emerging markets, significantly increased their gold holdings. The relationship between gold, the US dollar, and other assets is crucial. Geopolitical events and economic indicators continue to influence gold prices, which tend to move inversely to the US dollar and riskier assets.

Gold Price Technical Review

Gold has pulled back from its record high of $4,643, creating tension around the $4,600 mark. Strong US economic data from late 2025, including Producer Price Index and Retail Sales figures, are challenging for gold. This data decreases the chances of the Federal Reserve lowering interest rates soon. Core inflation eased to 2.6% in December 2025, a major improvement from the above-9% levels seen in 2022. However, with wage growth climbing to 3.8%, there are still underlying price pressures. This makes the Fed’s decisions more complex, meaning any new inflation reports could lead to significant market swings. Political risks are also supporting gold prices, especially regarding the tensions between the White House and the Federal Reserve. Any signs of threats to the Fed’s independence could lead to a swift movement toward safe assets. Additionally, ongoing tensions with Iran are helping prevent a more significant price drop for the moment. The daily chart illustrates an ascending wedge pattern, often indicating that upward momentum may be slowing and a reversal could be near. While gold remains above the nine-day moving average support at $4,535, a drop below the wedge’s bottom around $4,490 would signal bearish trends. Traders should watch these levels for potential breakdowns. Considering these conflicting factors and technical signals, options traders might think about strategies that could benefit from a large price movement in either direction. A long straddle, which involves buying both a call and a put option at the current price, could effectively profit from the anticipated breakout. This method is especially suitable for the high implied volatility expected in the coming weeks. It’s also essential to keep an eye on the US Dollar Index, which is holding steady around 99.10. After peaking above 114 in 2022, the dollar has weakened significantly, contributing to the gold rally. If the dollar index moves back towards the 100 mark, it may limit gold’s potential upside and pressure it to test key support levels. Create your live VT Markets account and start trading now.

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