Middle East tensions drive safe-haven capital back, gold returns above $4,100 and continues bullish volatility

　　

International gold prices resumed their upward trend during the Asian session on Wednesday, (XAU/USD) rose to around $4,120. Previously, gold prices had rebounded after dropping to near the $4,000 psychological level in the previous session, mainly due to worsening global risk sentiment as investors once again increased allocations to safe-haven assets. The main drivers of recent gold market movements continue to be the tug-of-war between geopolitical risks and macro policy expectations. Escalating tensions between the United States and Iran have led to significant fluctuations in commodity

　　Analysts indicate that the latest rally in gold largely reflects a return of buying interest after a price correction, rather than being driven by any major new market events. ING’s commodity strategist Eva Manthey commented that the current upturn in gold "seems more like buying at the dip rather than a direct market reaction to new information." This suggests investors continue to recognize gold’s long-term allocation value, but short-term trading logic is mainly affected by changes in risk appetites.

　　

Because gold is typically seen as a hedge against geopolitical risk and financial uncertainty, when markets worry about the impact on energy supplies, funds often flow toward the precious metals

　　Meanwhile, the inflation impact that may result from rising energy prices has also become a key concern in the gold market. If crude oil prices continue to rise due to supply risks, global inflationary pressures may reignite, influencing the future direction of central bank policy. For the Federal Reserve, the market is weighing the relationship between inflation risks and economic data. Recently, U.S. inflation data showed some signs of easing, leading markets to lower expectations for a rate hike at the Fed’s July meeting. However, traders still expect at least one policy adjustment before the end of the year.

　　

　　Currently, the market is awaiting further guidance on developments in the Middle East, changes in energy prices, and policy signals from Federal Reserve officials. In the short term, gold remains in a stage jointly dominated by safe-haven demand and expectations around monetary policy.

　　

　　Looking at the 4-hour cycle, after technical correction near $4,000, gold prices have rebounded and formed a short-term structure of oscillating recovery. Moving averages are turning upwards, indicating renewed buying interest. The RSI is rising from lower levels, showing improved short-term momentum, but is not yet in clearly overbought territory. If gold breaks the $4,150 resistance, further upside space could be opened; if it falls below $4,040, another test of $4,000 support is possible. The 4-hour chart currently shows bulls in control to a certain extent, but price action remains highly dependent on evolving geopolitical news.

　　Editor’s summary

　　Gold’s recent rebound has mainly been driven by safe-haven demand, as heightened uncertainty between the US and Iran has refocused the market on global energy supply risks and financial market volatility. However, the room for further increases in gold will still depend on Fed policy expectations and the direction of the dollar. From a medium- to long-term perspective, gold stands to benefit from greater global uncertainty and investor demand for safe allocations. But if energy risks subside and US economic data remains resilient, causing the Fed to keep rates high for longer, gold may face some pressure for correction. The market is now operating at the intersection of risk premium and rate expectations—key levels to watch are the breakout around $4,150 and whether support at $4,000 can hold.

Editor: Guo Jian