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Gold Holds Above $5,150 in Daily Trading; Upside May Be Limited Amid Bullish USD
Gold prices maintained moderate intraday gains during Wednesday’s Asian session, hovering slightly above the $5,150 level and rising around 1.30% on the day. Investors remain concerned about the prolonged Middle East conflict and its broader impact on the global economy, particularly amid an already fragile macroeconomic backdrop.
📊 Technical Analysis: Short-Term Bias Remains Bullish
From a technical perspective, the short-term outlook for gold remains slightly bullish. Prices continue to hold above the 21-day and 50-day Simple Moving Averages (SMA), which are trending higher and positioned above the longer-term 100-day and 200-day SMAs, reinforcing the prevailing uptrend.
The Relative Strength Index (RSI) is currently near 55, staying above the neutral midpoint. This signals positive momentum without entering overbought territory after cooling from previous extremes.
Gold has also reclaimed the 61.8% Fibonacci retracement level at $5,141.05, measured from the swing low of $4,401.99 to the record high of $5,597.89. This recovery suggests buyers are defending the current pullback zone within the broader bullish structure.
🔎 Key Support and Resistance Levels
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Immediate Support: $5,141.05 (61.8% Fibonacci retracement)
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Secondary Support: $5,067 (21-day SMA) and $4,999.94 (50% Fibonacci level)
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Deeper Support: $4,858.82 (38.2% Fibonacci retracement + rising 50-day SMA)
On the upside:
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Near-Term Resistance: $5,260 (recent swing high)
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Next Resistance: $5,340 area (near 78.6% Fibonacci at $5,341.96)
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Major Target: $5,600 (record high zone)
A daily close above $5,340 could pave the way for a renewed push toward the $5,600 all-time high, sustaining the dominant bullish trajectory.
🌍 Geopolitical Tensions Support Safe-Haven Demand
Gold continues to attract dip buyers, holding near a 1.50% gain so far this week. The overall bullish trend in the traditional safe-haven asset remains intact as global uncertainty intensifies.
Ongoing military tensions involving the United States, Israel, and Iran have fueled risk aversion across financial markets. According to reports from Reuters, Iranian drones and missiles have targeted oil refineries in the Gulf region, as well as US embassies in Saudi Arabia and Kuwait.
Additionally, concerns about potential disruptions in the Strait of Hormuz have heightened fears of an energy shock, contributing to inflation risks and complicating monetary policy expectations.
💵 USD Strength and Fed Expectations Limit Upside
Despite safe-haven demand, gold’s upside appears somewhat capped by renewed strength in the US Dollar (USD). Markets are reassessing expectations for rate cuts by the Federal Reserve, as rising oil prices could fuel inflation and delay monetary easing.
Earlier this week, gold briefly entered a “sell-everything” mode as investors liquidated positions to cover losses in global equities. However, a pause in the USD rally and consolidation in oil prices have supported the recent rebound in bullion.
📅 Key US Data to Watch
Gold’s next directional move may depend on upcoming US economic data, particularly:
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ADP Employment Change
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ISM Services PMI
Disappointing results could revive dovish expectations for the Federal Reserve and trigger a correction in the USD, potentially extending gold’s recovery.
On the other hand, further escalation in the Iran conflict could reignite global risk aversion, strengthening gold’s safe-haven appeal and supporting a move toward fresh record highs.