Gold edged up on Wednesday after Tuesday’s losses. XAU/USD traded near $5,192 after dipping to $5,121. A steady US Dollar and stronger equities capped gains. Trade worries returned after Donald Trump announced a 10% tariff on imports from all countries. This follows a US Supreme Court ruling that limits the use of the International Emergency Economic Powers Act (IEEPA).

Geopolitical And Trade Uncertainty

Markets are also watching US-Iran nuclear talks scheduled in Geneva on Thursday. Trump said he prefers diplomacy. Iran’s Deputy Foreign Minister Abbas Araghchi said Tehran is ready to take steps toward an agreement. Expectations for near-term Federal Reserve rate cuts have cooled as officials point to ongoing inflation pressure. Chicago Fed President Austan Goolsbee referenced the 2% inflation target, and Boston Fed President Susan Collins said rates may stay unchanged “for some time”. On the 4-hour chart, gold remains below $5,250 and is forming a rising wedge pattern. RSI (14) has dropped from above 70 to the high-50s. MACD (12, 26, 9) has crossed below its signal line, and the histogram is negative. A break above $5,250 could open the way to $5,500. A move below $5,100 may expose the 100-period SMA near $5,012, followed by $4,850 and $4,650.

Strategy And Risk Management

Gold remains stuck in a tight range as traders weigh major geopolitical risks against a firm Federal Reserve. The new 10% tariff on all U.S. imports and the upcoming Iran nuclear talks in Geneva are boosting demand for safe havens like gold. However, the strong U.S. dollar remains a key headwind and is limiting any rally. We have seen a similar setup before with trade policy. In 2019, gold rose more than 20% during the height of the U.S.-China trade conflict. With U.S. GDP growth slowing to 1.1% in Q4 2025, new tariffs could increase recession risk and make gold more attractive. Uncertainty around the Iran talks adds another layer of support. At the same time, the Federal Reserve is not supporting the bullish case. Policymakers remain focused on inflation. The latest January CPI report showed core inflation still elevated at 3.8%, and Fed officials are pushing back on market expectations for rate cuts. Fed funds futures have repriced sharply, with the odds of a March cut falling from above 70% last month to below 30% today. This clash of fundamentals, along with technical signals that momentum is fading, makes it risky to choose a simple long or short trade right now. Instead, consider options strategies that can benefit from a large move in either direction. A long straddle—buying both a call and a put with a strike near the current $5,200 level—fits this type of market. This approach can profit if gold breaks strongly above $5,250 on negative geopolitical headlines, or drops below $5,100 on hawkish Fed commentary. The premium paid is the maximum risk, giving a defined-risk way to trade expected volatility. This can be safer than holding a futures contract that may get whipsawed by conflicting headlines. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now