Gold(XAU/USD), failure to break resistance prompts profit-taking pressure… safe-haven demand acts as a 'bottom support'

Technical pressures are evident, but geopolitical risks are restraining the plunge

Gold(XAU/USD), which had shown strong gains over the past two days, retreated after facing selling pressure at the $4,500 psychological level. From a technical perspective, signs of weakening momentum are clear. The 100-hour MACD has fallen below the signal line, indicating a bearish tone, and the histogram is expanding downward. The RSI stands at 48.58, entering neutral territory, revealing no clear “one-sided advantage.”

However, the reason gold isn’t plummeting sharply is clear. The geopolitical risk remains a “burning fire” due to President Trump’s hints at Greenland annexation, military options being mentioned, and tough rhetoric towards Colombia and Mexico. Additionally, deadlock in Russia-Ukraine negotiations, instability in Iran, and issues in Gaza mean safe-haven demand has not disappeared entirely.

Tug-of-war between risk appetite and safe-haven demand

An interesting point is the market’s mixed reactions. The S&P 500 and Dow Jones hit record highs on Tuesday, showcasing risk appetite. The Venezuela issue was also treated as a manageable event rather than a shock, leaning the stock market toward optimism. This pushed down the short-term top of gold.

On the other hand, for safe-haven assets, risk factors remain ongoing. Until multiple geopolitical risks are fully resolved, gold is expected to defend its lower levels. As a result, gold is more likely to form a trading range amid a “tug-of-war” between profit-taking and risk hedging, rather than being in a complete upward trend.

US employment data and inflation reports will determine ‘next direction’

Uncertainty around Fed policy has led the market to reduce trading intensity. According to CME FedWatch, the market is pricing in a potential rate cut in March and an additional cut by the end of the year. Richmond Fed President Thomas Barkin emphasized that policy adjustments should be sensitive to incoming data, suggesting that the Fed’s future path could be influenced by economic indicators.

This week’s key events are Friday’s NFP(Non-farm Payrolls) and next Tuesday’s CPI(Consumer Price Index). NFP will likely serve as a catalyst for recalculating the timing of Fed rate cuts, while CPI will confirm inflation trends, potentially strengthening or weakening the Fed’s policy justification. Today’s ADP private employment report, ISM services PMI, and JOLTS job openings could also introduce short-term volatility.

Technical support levels are at $4,450–$4,445… if broken, check $4,400

In the short term, the $4,450–$4,445 zone is expected to serve as both support and resistance, acting as a congested area with concentrated orders. The 100-hour simple moving average (SMA) is rising and positioned below the current price, so if this zone is broken, the $4,400 level is likely to act as a fundamental support.

While the upward trend remains intact, momentum has cooled. To regain strength, RSI needs to return above 50, and the MACD must cross above the signal line again. Until then, gold is likely to continue defending its lower levels under the “umbrella” of geopolitical risks as a safe-haven asset.