Gold (XAU/USD) rose 0.6% to near $5,200 during European trading on Wednesday. Buying picked up as US-Iran tensions rose and traders faced fresh uncertainty over US trade policy after a US Supreme Court ruling.
The US and Iran are set to hold nuclear talks on Thursday. On Monday, US President Donald Trump said military action could follow if Tehran does not abandon plans linked to its nuclear programme.
Geopolitical Risk And Trade Policy Uncertainty
In the US, the Supreme Court blocked extra duties, saying Trump went beyond his authority by using economic emergency powers. After the ruling, Trump announced 10% global tariffs that could increase to 15%. He also warned that tariffs could rise further if countries do not follow trade deals.
From a technical view, gold is still holding above a rising support line that starts around $4,400. It is also above the 20-day EMA near $5,010. The 14-day RSI is near 60.00. Key support levels are $5,120, then $5,010, $4,880, and $4,750. Resistance sits near $5,240 and $5,380.
Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022, the largest annual purchase on record. Gold often moves in the opposite direction to the US Dollar, US Treasuries, and risk assets, and it can react to interest rates and geopolitical stress.
Right now, geopolitical risk and trade policy uncertainty are doing most of the work. Together, they are putting a strong floor under gold near $5,200 and lifting demand for safe-haven assets. The upcoming US-Iran talks are a key trigger. If the tone worsens, volatility is likely to rise.
Central Bank Demand And Macro Drivers
This trend has strengthened in recent years, helped by steady central bank buying. After record purchases in 2022 and 2023, central banks added another 980 tonnes in 2025. This signals ongoing concern about fiat currencies. Sticky inflation through 2024 has also kept institutional demand for hard assets firm.
For traders, the clear uptrend may favour using options to control downside risk while staying bullish. Call options or bull call spreads could benefit if gold pushes toward the $5,380 target highlighted in the technical outlook. The support area near $5,120 and the moving average around $5,010 are key levels to watch when planning these trades.
Options markets are also showing the tension. Implied volatility on gold futures is rising ahead of geopolitical deadlines. Open interest is building in out-of-the-money calls, especially strikes above $5,300 that expire next quarter. This suggests traders are positioning for a sharp rise rather than a drop.
Gold is also getting support from a weaker, choppy US Dollar since the Supreme Court decision changed the trade outlook. A volatile or falling dollar typically supports gold. Traders may want to watch the Dollar Index closely. If it breaks below recent lows and stays there, gold could retest $5,240 and move higher.
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