Gold price battles the $4,500 psychological resistance level... Profit-taking vs risk, a tug-of-war centered on risk

Gold(XAU/USD) retreated as it faced selling pressure near $4,500. This follows a strong rally over the past two days, with profit-taking demand emerging. However, ongoing safe-haven capital inflows supported by geopolitical uncertainties(Venezuela tensions, Trump’s Greenland mention, pressure on Colombia and Mexico, Russia-Ukraine war, Iran, and Gaza conflicts) continue to limit sharp declines.

Market Sentiment: A Tug-of-War Between Risk Appetite and Geopolitical Concerns

The current market is trying to find balance amid contradictory signals. On one hand, the S&P 500 and Dow hit record highs on Tuesday, indicating risk appetite remains dominant, which has led to profit-taking in gold. This was partly because the Venezuela issue was perceived as manageable news rather than a shock to the market.

On the other hand, there are reports that the White House is considering options including military measures to acquire Greenland(, and President Trump maintains tough stances on Colombia and Mexico, keeping geopolitical tensions “uncooled.” Additionally, Russia-Ukraine negotiations deadlock, Iran tensions, and Gaza conflicts compound the chain of risk factors, preventing a resolution. This acts as a support for gold’s lower bound—like a tug-of-war with both sides pulling with similar force.

Interest Rate Environment and Dollar Weakness: Favorable Conditions for Safe-Havens

Expectations of Fed rate cuts are already priced in by the market. According to CME FedWatch, traders are assessing the probability of a rate cut in March and an additional cut by year-end. Richmond Fed President Thomas Barkin mentioned that short-term rate adjustments should depend on incoming data, implying future policy could become more sensitive to economic indicators.

The dollar failed to sustain its rebound yesterday, creating a favorable environment for gold.

Weekly Focus: Cautious Positioning Ahead of Data Releases

As key economic indicators approach, market participants are becoming more cautious. Friday’s NFP)Non-Farm Payrolls( will be a decisive factor in recalculating the likelihood of Fed rate cuts, while next Tuesday’s CPI)Consumer Price Index( will serve to confirm inflation trends and either bolster or weaken the Fed’s policy rationale.

Today)Wednesday( also features events like ADP private employment, ISM services PMI, and JOLTS job openings, which could trigger short-term volatility in gold and the dollar. While these are unlikely to change the overall trend, they can ignite strong directional moves.

Technical Outlook: Key Buffer Zone at $4,450–$4,445

The upward trend remains valid, but momentum is waning. In the short term, the $4,450–$4,445 zone acts as a congestion support and buffer area. The 100-hour simple moving average)SMA( is rising and positioned below the price, potentially acting as a baseline support near $4,400.

Looking at technical indicators, the 100-hour MACD has fallen below the signal line, signaling bearish momentum, with the histogram expanding downward. The RSI stands at 48.58, indicating a neutral stance without bias. To regain bullish momentum, RSI needs to rise above 50, and MACD should show signs of improvement.