gold prices extended their recovery on Thursday, after initial declines to near $4,065, and pushed towards the $4,100 level amid heightened geopolitical tensions and trade uncertainties. The precious metal found support from ongoing safe-haven buying amid a backdrop of escalating tensions between the United States and China, as well as geopolitical developments involving Russia.
Market sentiment remained cautious following reports that the US is contemplating restrictions on exports of software and technology — a move seen as a retaliatory measure against China’s recent export controls on rare earth materials. This potential escalation in US-China trade tensions contributed to risk aversion, bolstering demand for gold as a safe-haven asset. Additionally, US sanctions targeting Russian oil companies and accusations of insufficient progress in resolving the conflict in Ukraine added to the overall geopolitical uncertainty.
Meanwhile, negative earnings reports from prominent US technology companies weighed on investor confidence. Tesla ’s earnings fell short of expectations, while netflix issued a grim outlook, pressuring related equities. apple ’s shares also declined in response to an EU antitrust complaint, underlining concerns about regulatory pressures on major tech firms. Despite stated optimism regarding a possible US-China trade deal next week, such hopes were overshadowed by a broad risk-off environment, which also strengthened the US dollar. The greenback’s safe-haven status was further reinforced by declines in the British pound and Japanese yen, diminishing the appeal of alternative currencies.
Looking ahead, attention turns to the upcoming US Consumer Price Index data, which is expected to influence Federal Reserve policy expectations. Although rate cuts are already priced in, traders may opt to realize profits from gold positions ahead of the release. Technical analysis indicates potential for further gains if gold can recapture resistance levels. The near-term resistance appears at around $4,129, with further upside expected towards $4,300 and potentially new record highs above $4,382. Conversely, failure to maintain support at key Fibonacci retracement levels could trigger a correction toward $3,972 or lower.
