Gold searches for a new trend

XAU/USD

Key zone: 5,200.00-5,400.00

Buy: 5,450.00(after retesting the 5.350 level); target 5,700.00; StopLoss 5,380.00

Sell: 5,150.00(on strong negative fundamentals); target 4,900-4,850; StopLoss 5,220.00

At the start of the week, gold instantly reacted with a spike to $5419 — the precious metal fulfilled its role as protection against geopolitical shocks. However, the most interesting development came later, when the price retreated just as sharply.

The escalation of the conflict in the Middle East became an additional factor disrupting precious metals flows, which had already been affected last year by US tariffs, leading to significant stockpiles accumulating within the United States.

Reminder:

Gold is traditionally considered a reliable hedge, but in modern markets it often becomes a victim of leveraged speculation. Speculators and large investors buy the asset on the first informational impulse, then quickly dump positions to lock in profits or face forced liquidations.

We believe the current pullback is not a panic sell-off but a fairly controlled reduction of the safe-haven premium. Markets have priced in the worst-case scenario but have not yet seen signs of a prolonged catastrophe.

There is another important factor in the current situation: Dubai is a key transport hub for precious metals shipments from Africa and Europe to Asia (mainly India) and accounts for more than 20% of global gold flows.

Now global flows of gold and silver have encountered problems. Since the start of US and Israeli strikes on Iran, commercial flights from the Persian Gulf have been suspended. On Tuesday, several passenger flights departed from Dubai, but according to sources, they did not carry gold, as priority was given to perishable cargo.

Prolonged supply disruptions could lead to rising gold and silver prices in Asia and increase their speculative volatility.

The first reaction is already visible: prices in India moved from a discount of about $50 per ounce on Friday to London price levels on Monday.

Some logistics companies are handling precious metals shipments already designated for airlines at London Heathrow Airport, as carriers are no longer able to transport them. This has resulted in cases of “unfinished exports” — goods already presented for customs clearance and subject to withdrawal before rerouting.

Silver is more exposed to supply flows from London, so the logistical problems in the Persian Gulf are not yet reflected in its price.

Incidentally, critics have long accused Dubai of smuggling illegally imported gold. A report by the NGO SwissAid claims that in 2022, gold worth tens of billions of dollars was illegally imported through the UAE.

Historically, geopolitical speculation in gold tends to be short-term. If the conflict does not directly disrupt global logistics and does not trigger prolonged oil price spikes, large capital sees little reason to freeze liquidity in non-yielding safe-haven assets for long.

If the Middle East crisis continues, large capital will begin forming a new structural trend in gold that short-term speculation will no longer be able to reverse.

Therefore, institutional investors are currently focused not on the mere fact of military conflict, but exclusively on the duration of instability.

So we act wisely and avoid unnecessary risks.

Profits to y’all!