25/02/26

13

Gold is showing signs of momentum to reclaim the $5,200 level early Wednesday, bolstered by a softer U.S. dollar and mounting geopolitical concerns. This move comes amidst a generally subdued dollar environment, which has provided a conducive backdrop for precious metal investors.

The US dollar has retreated from near monthly highs against other major currencies, driven by market expectations of a dovish stance from the Federal Reserve. These expectations have been reinforced by recent remarks following President Trump’s State of the Union address, which emphasized tariffs and Iran’s missile program, leading to diminished confidence in the US currency. Simultaneously, Asian equity markets are gaining ground, mirroring gains seen on Wall Street, as traders engage in profit-taking ahead of key earnings reports, notably from Nvidia Corporation.

Geopolitical tensions, especially concerning Iran, continue to underpin gold’s appeal as a safe-haven asset. Traders are cautious heading into upcoming nuclear talks in Geneva, providing additional support for gold prices. Market participants are likely to focus on speeches by Federal Reserve officials and broader risk sentiment in the coming sessions, both of which could influence gold’s trajectory.

From a technical perspective, gold maintains a mildly bullish bias. The recent price action remains supported by key moving averages, with the 21- and 50-day simple moving averages (SMAs) trending upward and the relative strength index (RSI) indicating room for further gains without overbought pressures. Immediate support levels are identified near the Fibonacci retracement of recent highs, with the $4,999 level serving as a critical pivot point. On the upside, resistance is seen around $5,141, with a break above potentially opening the way toward the next target zone in the $5,340 range.

Historically, gold’s appeal stems from its role as a store of value and hedge against inflation and currency depreciation. Central banks, particularly in emerging economies like China, India, and Turkey, have been increasing gold reserves, underpinning the metal’s long-term fundamentals. Its inverse correlation with the US dollar and US Treasuries, along with its relationship with risk appetite, continues to influence price movements, making it a key asset during times of economic uncertainty.