Why Does Gold Struggle to Rise When Risks Are High?
Gold is on the defensive after falling back below $4,700/oz, extending the pressure that has been building since the geopolitical rally lost momentum. Fundamentally, the market is now more focused on "energy inflation" and supply chain uncertainty than simply the ceasefire headline, so gold doesn't automatically receive a strong safe-haven boost.
The US-Iran standoff and energy flow disruptions have kept oil prices high, which amplifies inflation risks. The transmission channel is clear: high oil prices contain disinflation, increasing the likelihood of interest rates remaining tight for longer, and this poses a drag on gold as a non-yielding asset. In recent sessions, the "higher-for-longer" narrative has regained its dominance as the market assesses that inflation risks have not abated.
From the dollar's perspective, a strengthening USD has also put pressure on gold because dollar-denominated gold becomes more expensive for non-USD buyers. In risk-off conditions, the dollar often finds safe-haven flows more quickly, allowing gold to remain stable despite persistent geopolitical tensions, especially when the market perceives inflation risks as more "sticky" than growth risks.
Technically, the $4,700 area is a key psychological level, with prices hovering around $4,690–$4,700 in recent updates. As long as prices remain below 4,700, the short-term bias tends to be defensive, as the market views weakness as still "valid" after breaking through that round level.
For recovery, the market will assess gold's ability to reclaim the $4,725 area (the pivot point from previous sessions) as a signal of stabilization. Above this, the $4,830 area serves as the next resistance point, which served as a "steady" point when the market was weighing the possibility of talks and the Fed's direction.
The most important variables determining the next direction remain a combination of geopolitical headlines (shipping status/energy flows) and US interest rate pricing. As long as high oil prices keep inflation risks in check and the dollar remains firm, gold is at risk of being held back; conversely, if the dollar weakens and yields fall, coupled with a de-escalation of supply risks, gold typically has an easier time building a recovery. Things to watch: the direction of the dollar, interest rate expectations (especially ahead of the FOMC), and the latest developments in the energy sector. (asd)*
Source: Newsmaker.id
