Gold believes in the upside

XAU/USD

Key zone: 5,100.00-5,300.00

Buy: 5,250.00(after retesting the 5.150 level); target 5,450-5,500; StopLoss 5,150.00

Sell: 5,000.00(on strong negative fundamentals); target 4,750.00; StopLoss 5,100.00

Renewed fears of a trade war combined with escalating geopolitical tensions in the Middle East have become the main catalysts supporting gold as a safe haven and reinforcing a new bullish scenario.

After the U.S. Supreme Court ruled against his controversial tariffs, Trump announced a new program and imposed a 15% tariff (the legal maximum) on all U.S. imports. As a result, panic over economic risks stemming from disruptions in global supply chains intensified — investors once again turned to gold for hedging.

Gold has always reacted sharply to politics: gold futures climbed to $5,171 per ounce, while the spot market clearly targeted a breakout above the January high of $5,318.40.

It is important to distinguish between the price driver and the mechanical driver of the metals market: in critical moments, gold is supported not only by emotion but also by the market’s infrastructure response (inventories/flows/spreads).

The World Gold Council notes that tariff threats increase “flight-to-quality” demand, as well as COMEX inventories and shifts in logistics/premiums (physical metal moves closer to contract delivery points).

• In fact, gold effectively transformed from a reliable hedge into a speculative asset back in 2022, when the freezing of Russia’s foreign exchange reserves triggered a true anti-dollar revolution. Central banks began actively buying bullion, increasing the share of precious metals in reserves.
• After that, the XAUUSD rally accelerated exponentially, but such a “price bubble” is bound to burst. For now, the market has simply shed excess weight before a new upward move.
• Weak U.S. GDP in Q4 — just 1.4% year-over-year versus 4.4% in Q3 — amid a record government shutdown. Combined with trade uncertainty, this pressures the U.S. dollar and supports gold.
• Institutional investors assess the fundamental overvaluation of XAUUSD through the lens of real interest rates in the debt market and the U.S. dollar. Valuations are at their highest since the gold rush of the 1970s.
• At present, prices are being pushed higher by the crowd, while hedge funds and asset managers have reduced their net long positions in the precious metal to the lowest levels in over a year.

And what is the result?

The most likely short-term scenario appears to be consolidation until strong fundamental factors emerge..

De-escalation in the Middle East, Fed passivity, and the resulting strengthening of the U.S. dollar will actively hinder gold bulls. Conversely, an armed conflict in Iran and the specter of a U.S. recession would provide solid support to XAUUSD buyers.

A recovery of the upward trend toward $6,200–6,500 over the coming months is вполне realistic, as demand for the physical asset remains strong, the Fed is likely to resume monetary easing, and no better geopolitical hedge than gold exists.

Gold’s rally potential has not yet been fully realized. In the absence of liquidity shortages and with the precious metal detached from fundamental drivers — including real Treasury yields and the U.S. dollar — virtually anything is possible.

So we act wisely and avoid unnecessary risks.

Profits to y’all!