Gold(XAU/USD) pauses just below $4,500… short-term gains secured vs. a tense tug-of-war over geopolitical tensions

On Wednesday, in the Asian markets, gold faced selling pressure around the psychological resistance level of $4,500, leading to a correction phase. After a sharp rise over the past two days, there was a move to realize short-term gains. However, layered geopolitical risks—such as the Venezuela issue, Trump’s mention of Greenland, pressure on Colombia and Mexico, the Russia-Ukraine war, Iran tensions, and the Gaza situation—are preventing a breakdown of the downside.

Risk-On vs. Safe-Haven Demand, Currently Risk-On Prevails

What’s interesting is the market reaction. The S&P 500 and Dow Jones indices hit record highs on Tuesday. This indicates that investors are perceiving the Venezuela issue as a short-term variable rather than an immediate threat. As risk appetite increases, profit-taking in safe assets like gold naturally surges.

At the same time, the hawkish tone from the Trump administration has widened the spectrum of geopolitical risks. Discussions of acquiring Greenland, including military options, and a stern tone toward Colombia and Mexico have heightened peripheral instability. The deadlock in Russia-Ukraine negotiations, Iran tensions, and Gaza issues have layered into a chain of geopolitical risks, transforming them from isolated events into a series of interconnected risks.

Fed Rate Cut Path, Market Reflects Possibility of One More Cut by Year-End

The interest rate environment remains favorable for gold. According to CME FedWatch data, the market has already priced in the possibility of a rate cut in March and an additional cut by the end of the year. Richmond Fed President Thomas Barkin mentioned that short-term rate adjustments should align with incoming data, suggesting that the policy path could become more sensitive to economic indicators. The dollar also failed to sustain its rebound yesterday, so the environment for gold buying remains intact.

Why Are Traders Cautious This Week?

Ahead of key indicators, a cautious stance dominates over position-building:

• Friday NFP (Non-Farm Payrolls): A key report that could recalibrate the probability of a Fed rate cut in March.
• Next Tuesday CPI (Consumer Price Index): To assess inflation trends and strengthen or weaken the Fed’s policy rationale.
• Today (Wednesday) releases: ADP private employment, ISM Services PMI, and JOLTS job openings could influence short-term volatility.

These indicators are more likely to act as catalysts for changing the ‘direction’ rather than reversing the overall trend.

Technical Landscape: Buffer Zone at $4,450–$4,445 Holds the Uptrend

The upward trend remains intact, but momentum has cooled:

• Support/Buffer Zone: The $4,450–$4,445 range is acting as a congestion area.
• Underlying Support: The 100-hour SMA is rising and positioned below the price, serving as a fundamental support around $4,400.
• MACD Signal: The 100-hour MACD has fallen below the signal line, indicating bearish momentum, with the histogram expanding downward.
• RSI: At 48.58, it has entered neutral territory, indicating no dominance by either side.

To regain bullish momentum, RSI needs to climb above 50, and MACD signals should improve. Whether the $4,450 support holds will likely be a key psychological turning point in the short term.