By Linh Tran, Market Analyst at XS.com
Gold is currently trading just below the 5,200 USD/oz level, reflecting a balance between safe-haven demand and expectations of easing geopolitical tensions. The market’s focus remains on the U.S.–Iran nuclear negotiations in Geneva. The latest rounds of talks have not produced a clear outcome, leaving geopolitical risks present but not escalating. This has kept gold at elevated levels, though it has not yet provided sufficient momentum to establish a sustainable bullish trend.
From a flow perspective, a notable signal comes from SPDR Gold Trust, which purchased nearly 19 tons over three consecutive sessions. The swift return of institutional inflows suggests that hedging demand remains intact. This is a key factor supporting gold’s elevated price base, particularly as policy and geopolitical uncertainties have yet to be fully resolved.
However, the main constraint on gold’s upside stems from the interest rate environment. U.S. inflation remains above the Federal Reserve’s 2% target, making near-term monetary easing more difficult. As a result, gold may struggle to stage a strong breakout in the short term, even though safe-haven demand persists.
In addition, uncertainties surrounding trade policy and the global growth outlook continue to provide an underlying layer of support for the precious metal. In an environment where growth is slowing but inflation has not been fully contained, gold typically serves as a portfolio risk-balancing asset.
Looking ahead, the gold market will be particularly sensitive to several key factors. First is the next phase of the U.S.–Iran negotiations and whether geopolitical tensions genuinely de-escalate, as any positive or negative development could quickly reshape safe-haven demand.
Moreover, U.S. economic data, especially inflation, labor market figures, and business activity indicators, will guide expectations for monetary policy, directly influencing Treasury yields and the U.S. dollar.
In my view, the more probable short-term scenario is that gold continues to consolidate below the 5,200 USD/oz area rather than forming a decisive upward trend. A clear breakout would likely require a strong catalyst, such as a meaningful decline in yields, clearer signals of monetary easing, or a significant escalation in geopolitical risks.
Conversely, if negotiations show tangible progress and yields remain elevated, gold could face technical correction pressure. Nevertheless, given that institutional flows still reflect notable interest, any pullbacks are more likely to represent position rebalancing rather than a reversal of the broader medium-term trend.