Gold remains strong at around $4,330, shaped by uncertainties about the Federal Reserve’s (Fed) monetary policy. Traders are cautious, looking for a chance to break above the $4,350 level.

Gold’s Appeal Amid Geopolitical Tensions

Rising geopolitical tensions enhance gold’s attractiveness. Increased central bank buying and steady inflows into Gold-backed ETFs add to this demand. Upcoming US economic reports, particularly the Nonfarm Payrolls and Consumer Price Index, could impact the Fed’s decisions. China’s recent economic data showed slower growth, which contributes to a risk-averse attitude. Ongoing conflicts, like the stalled peace process between Russia and Ukraine, increase demand for safe assets such as gold. The Fed recently raised interest rates by 25 basis points but hinted at a pause in future hikes. This has sparked speculation about potential rate cuts. Policymakers are cautious, reflecting different views on inflation and economic health. Technical indicators suggest a supportive trend for gold, with clear support and resistance levels in place. Gold often rises when the US Dollar and treasury bonds weaken. It is a favored option for central banks, especially in uncertain times, as seen by heavy purchases in 2022. With gold steady near $4,330, we are watching the resistance at $4,350 closely. The Fed’s recent rate adjustment to a 3.50%-3.75% range boosts the fundamental outlook for gold, setting up a potential move towards the all-time high of about $4,381.

Gold’s Solid Support Remains Strong

Gold’s solid support continues thanks to ongoing demand from central banks. In 2022, central banks bought a record 1,136 tonnes of gold, and data from the World Gold Council for Q3 2025 shows this trend is still strong, further supporting safe-haven demand. Additionally, gold-backed ETFs saw inflows of over 50 tonnes last month, providing a firm foundation for gold’s price. This week’s delayed Nonfarm Payrolls and CPI reports are key events that will likely impact the Fed’s next actions. Historically, when the Fed began easing in 2019, gold jumped over 20% in the following year. Many are watching for a soft labor market or lowered inflation, which would likely fuel expectations for more rate cuts and push gold higher. Given the positive technical setup and underlying fundamentals, buying call options with strike prices above the $4,350 resistance might be a good strategy. This allows us to take advantage of a breakout while limiting our risk to the cost of the option. The high implied volatility for options expiring this week suggests the market is ready for significant price movement after the data is released. A long straddle—buying both a call and a put option at the same strike price—could be a smart way to navigate the news. This strategy benefits from large shifts in either direction, shielding us from losses due to unexpected data. For those looking to buy gold on any dips, selling cash-secured puts at the crucial $4,250 support level is an appealing strategy. This not only generates immediate income from the premium but also allows for gold purchases at better entry points if prices decline. Create your live VT Markets account and start trading now.

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