Gold price stalls just below $4,500... A tug-of-war between profit-taking and geopolitical uncertainties

Short-term correction appears but support at the lower end remains solid

Gold(XAU/USD) prices are under pressure near the psychological resistance level of $4,500 during Wednesday’s Asian trading hours. This phenomenon follows a sharp rise over the past two days, with selling pressure focused on locking in profits. However, the decline has not accelerated into a sharp drop, as complex geopolitical risks—such as the situation in Venezuela, Trump’s Greenland remarks, pressure on Colombia and Mexico, the Russia-Ukraine war, Iran tensions, and the Gaza conflict—continue to support safe-haven demand.

Geopolitical variables persist despite risk asset preference

While stock markets reacted positively, risk appetite remained dominant. The S&P 500 and Dow Jones hit record highs on Tuesday, which has limited short-term gains in gold. However, at the same time, discussions within the Trump administration about acquiring Greenland(including military options) and a tough stance toward neighboring countries increase regional instability. The lack of progress in Russia-Ukraine negotiations, worsening Iran tensions, and ongoing Gaza conflicts all contribute to geopolitical risks that can still support gold prices at the lower end.

Expectations of Fed rate cuts and dollar weakness backdrop

In terms of interest rate policy, markets are pricing in a rate cut by the Fed in March and additional cuts by the end of the year. Richmond Fed President Thomas Barkin mentioned that short-term rate adjustments should depend on incoming economic data, implying increased sensitivity of future monetary policy. The dollar’s inability to sustain a rebound yesterday also creates a positive environment for gold prices.

Key indicators this week likely to determine direction

Friday’s non-farm payrolls (NFP) and next Tuesday’s US Consumer Price Index (CPI) are key events. NFP is a crucial factor that could recalibrate the probability of Fed rate cuts, while CPI data will confirm inflation trends and influence the Fed’s policy stance. Today(Wednesday), relatively less impactful indicators such as ADP private employment, ISM services PMI, and JOLTS job openings will be released. These are unlikely to change the trend but may influence short-term volatility and investor sentiment.

Technical focus on support zones acting as buffers

As short-term momentum weakens, technical support zones are becoming more important. The $4,450–$4,445 range can serve as a congestion support/buffer zone, with the 100-hour simple moving average (SMA) rising below the price, establishing a base support around $4,400.

The MACD is below the signal line, indicating bearish signals, and the histogram is expanding downward. The RSI stands at 48.58, remaining neutral, with no clear dominance. To confirm an upward trend, RSI needs to return above 50, and MACD should re-enter above the signal line. If prices fall below $4,445, the $4,400 level may be tested.

Overall, gold is in a short-term correction phase, but structurally, geopolitical risks and Fed rate cut expectations continue to serve as support. As investors await major economic indicators, the next direction is likely to depend on US CPI and NFP data.