Gold rose on Wednesday after dropping to a near two-week low of $4,842 on Tuesday. It traded near $4,952, up almost 1.50% on the day, as buyers stepped in after the dip. Gains were limited because geopolitical tensions eased and the US Dollar stayed strong. US-Iran talks in Geneva reported a “general agreement on a set of guiding principles”. Iranian negotiators are expected to return in two weeks with proposals.

Dollar Support And Fed Outlook

The US Dollar held firm after strong US labour market data, which lowered hopes for an early Federal Reserve rate cut. Fed Governor Michael Barr said rates should stay unchanged for a while, until inflation moves toward the 2% target. Chicago Fed President Austan Goolsbee said cuts could still happen this year if inflation keeps easing. US Durable Goods Orders fell 1.4% in December versus 2.0% expected, after a 5.4% rise in November. Excluding Transportation, orders rose 0.9% after 0.5% previously. Markets now focus on January Industrial Production and the FOMC minutes, followed by US Q4 GDP and the Core PCE Price Index. On the 4-hour chart, price is below the 100-period SMA at $5,011.07 and above the 200 SMA at $4,838.85, with RSI (14) at 43 and ATR (14) at 52.01. As of February 18, 2026, gold is stuck in a tight range, which makes range-based strategies attractive in the near term. Buyers showed strong support near $4,842, while resistance is limiting gains around $5,000. In this setup, selling cash-secured puts below support or selling covered calls near resistance may help generate income. This fits the current indecision as traders wait for clearer signals.

Positioning For Near Term Volatility

The strong US Dollar is slowing gold’s upside, so a cautious or hedged approach may be sensible. The US Dollar Index has held above 104 for several weeks. This strength is supported by a resilient labour market, with more than 200,000 jobs added last month. If traders expect further dollar strength, short-dated put options on gold could help hedge the risk of a drop below $4,800. Over the longer term, the outlook still supports a move higher, helped by expectations that the Fed may pivot later this year. Central banks added a net 800 metric tonnes to official gold reserves in 2025, and that demand helps create a strong price floor. Because of that, any sharp dips toward the $4,800 support zone could be viewed as chances to buy call options dated for the second half of the year. Volatility will be crucial over the next two weeks, especially with the FOMC minutes and PCE inflation data coming up. With gold’s implied volatility near a three-month low, option premiums are relatively cheap. That can make strategies like a long straddle or strangle more attractive. These trades aim to benefit from a large move in either direction after key data, without needing to predict the direction. The most important levels to watch are the moving averages, which may act as triggers for the next move. A clear break and close above $5,011 would signal adding to bullish positions. A sustained move below $4,838 would suggest a deeper correction. Until gold breaks one of these levels, the focus stays on trading the range and preparing for higher volatility. Create your live VT Markets account and start trading now.

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