Gold Breaks Through 4,600: Not Just a "Safe Haven," This Is Its Main Engine
Gold prices surprised the market again after breaking through the US$4,600 per ounce area, extending the rally that has been underway for the past few sessions. This increase underscores one thing: amidst a mix of political risks, interest rate expectations, and geopolitical turmoil, gold remains a favorite "parking place" for global investors.
The biggest driver came from the United States. The market has become increasingly sensitive to the issue of the independence of the central bank (the Fed) following news of legal action against Fed Chairman Jerome Powell. For market participants, this issue is more than just a headline—it touches on confidence in the direction of interest rate policy. When confidence is shaken, investors tend to reduce exposure to the dollar and seek assets perceived as safer.
On the economic data side, the US jobs release also provided "room" for gold to continue strengthening. The figures weren't strong enough to kill the chance of an interest rate cut, but they weren't bad enough to trigger recession panic. This combination typically creates ideal conditions for gold: rate cut expectations remain alive, while demand for hedge assets remains strong.
In addition to economic factors, geopolitical risk premiums also boost prices. The escalating situation in Iran has strengthened the hedge against safe-haven sentiment, especially when energy markets have also reacted—oil has strengthened due to concerns about supply disruptions. In such conditions, gold is often the primary choice to anticipate "headline risk" scenarios that could emerge at any time.
From a demand perspective, buying by central banks and institutional investors remains strong. This means that gold's rally is not solely dependent on daily sentiment but also provides a structural "cushion" that supports the price during minor corrections.
Technically, the 4,600 area holds significance because it serves as a psychological level and a point that often triggers automated orders. When the price breaks through a round level like this, two effects typically occur simultaneously: buyers break out, recognizing a strong trend, and short-covering occurs as positions countering the trend are forced to close. This is why the movement after breaking through a round level often feels rapid.
On the intraday chart, 4,600 now has the potential to become new support if the price is able to hold above it. The areas traders typically monitor after a surge are a retest of 4,600, followed by the 4,570–4,560 zone as the closest support in the event of a pullback. Below that, 4,520–4,500 serves as a larger buffer zone—a decisive breach of these levels would typically signal a deeper correction, rather than simply a healthy pullback.
On the upside, as long as momentum remains strong, the market will target the 4,620–4,650 area as the next resistance. If it breaks through, the next psychological target, often cited by market participants, is 4,700. However, sharp gold rallies are often followed by a "breathing" phase of consolidation, especially if comments from central bank officials or inflation data alter interest rate expectations.
Going forward, the market's focus will be on two things: the direction of the dollar and interest rate expectations, as well as developments in geopolitical risk. As long as these two drivers remain supportive—a weakening dollar and high uncertainty—gold still has a strong case for holding high, albeit with the potential for greater volatility.
5 Key Points
Gold broke through the 4,600 area, driven by a combination of a weakening dollar and rising uncertainty.
The Fed's independence issue made the market more defensive, supporting gold.
US employment data kept the possibility of a rate cut open, supporting gold prices.
Geopolitical tensions (especially Iran) added to the safe-haven premium.
Technically, 4,600 is a key level: holding above it = continued bullish; failure to hold = risk of a pullback to the lower support area.
Source: Newsmaker.id
