Gold’s value rose by 0.25% to $4,772 after President Trump softened his position on Greenland, reducing earlier geopolitical worries. Although it dropped from a peak of $4,888, gold remains steady due to political uncertainty and ongoing Supreme Court activities. Trump stated there would be no military action regarding Greenland, which boosts gold’s attractiveness as a safe haven. We are awaiting important economic reports, including US GDP, Jobless Claims, and Core PCE, for new signals in the market. US Treasury yields have fallen, benefiting gold, while a slight increase in the US Dollar index has affected gold’s momentum.

Technical Analysis Overview

Technical analysis indicates that gold maintains a bullish trend. If it surpasses $4,800, it could challenge the $4,900 mark. If it drops below $4,800, key support levels are $4,766 and $4,700. Central banks, particularly in emerging economies, increased their gold reserves by 1,136 tonnes in 2022. Gold typically moves inversely to the US Dollar and Treasuries. It is influenced by geopolitical issues, interest rates, and currency strength, serving as a safe-haven asset in turbulent times. Interest in gold remains high as it acts as a hedge against inflation and currency decline. While gold has declined from its near $4,900 heights, the overall trend is still strong. The easing of immediate geopolitical tensions provides a momentary break, presenting traders with crucial decisions. This environment suggests increased volatility as the market processes mixed signals. We are keeping a close eye on upcoming US economic data, specifically the Core PCE figures. The market anticipates rate cuts later this year, but this contrasts with the stubborn inflation seen in 2023 and 2024. The difference between market expectations and potential Fed actions creates opportunities for trading interest-sensitive assets.

Central Bank Demand and Trading Strategies

Consistent demand from central banks is significant, particularly since 2022. Official purchases in 2024 and 2025 have been robust, with China’s central bank adding over 200 tonnes last year. This strong demand provides a solid support level for prices and makes any large drops appear as good buying opportunities. Given the high prices and potential for sudden shifts, traders are wisely using options to manage their risks. Purchasing call options at or above the key $5,000 level allows traders to capture more upside while limiting downside risk. On the other hand, using put options to hedge below the $4,700 support level is a smart strategy to guard against a sudden downturn due to hot inflation data. Create your live VT Markets account and start trading now.

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