Gold holds uptrend as rate cut bets and global tensions intensify
|Gold (XAUUSD) is holding firm as macro and geopolitical forces continue to support its long-term uptrend. Expectations for more Federal Reserve rate cuts in 2026 have lowered real yields, increasing the appeal of non-yielding assets like gold. At the same time, global tensions remain elevated, with renewed conflict risk between Russia and Ukraine driving safe-haven demand. Despite a brief margin-driven correction, gold quickly stabilized, showing strong underlying support and confidence in the broader bullish trend.
Gold strengthens on rate cut bets and rising global tensions
Gold is holding firm and remains on track to resume its upward momentum. Expectations for Federal Reserve rate cuts in 2026 continue to support gold’s bullish outlook. The Fed lowered interest rates three times in 2025, and markets now anticipate further cuts in the coming year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive. As real yields fall, demand for safe-haven assets tends to rise, enhancing gold's strategic appeal.
Meanwhile, geopolitical tensions remain a major catalyst. Russia accused Ukraine of a drone strike on a sensitive location, escalating already fragile relations. Ukraine denied the accusation, calling it a pretext for further aggression. The renewed conflict risk drives uncertainty, which typically boosts safe-haven flows into gold. With no resolution in sight and global flashpoints expanding, geopolitical instability continues to underpin gold prices.
The CME’s decision to raise margin requirements on gold, silver, and other metals triggered a sharp wave of position adjustments across the market. As a result, the increased capital demands led to short-term liquidation and intensified selling pressure. Despite the swift correction, gold quickly stabilized. Market participants stepped back in, reflecting underlying confidence in the broader bullish trend.
Gold price action stays bullish within technical wedge formation
The gold chart below shows price action unfolding within a well-structured ascending wedge. Since November 2024, the price has consistently respected both the upper and lower boundaries. Recently, gold approached the upper boundary but encountered resistance near the $4,550 level, triggering a sharp pullback. However, it found support before breaking below the mid-range of the wedge, confirming that the broader structure remains intact.
Each prior rejection at the upper boundary triggered short-term corrections, followed by renewed upward momentum. The current pullback follows a similar pattern. As long as price action remains within the wedge, the overall bullish trend stays intact. The rising lower boundary offers a key support zone near $4,000. A break below that level could suggest deeper consolidation, but for now, the trend remains upward.
Moreover, the pullback may represent a constructive pause within the larger uptrend, supporting the potential for further gains. The wedge’s upper line, extending toward $4,800, provides the next technical resistance. A clean break above that zone could trigger a fresh leg higher. Until then, gold remains in a rising structure with well-defined support and resistance levels guiding near-term direction.
Gold outlook: Uptrend intact as macro drivers and technical structure align
Gold remains well-supported by a combination of macro and technical factors. Despite the recent margin-driven pullback, the broader uptrend is intact as expectations for Fed rate cuts and rising geopolitical tensions continue to drive demand for safe-haven assets. Technically, gold is trading within a well-structured ascending wedge, with price action respecting key support levels. As long as the structure holds and real yields remain under pressure, the outlook favors continued upside, with the $4,800 zone emerging as the next key resistance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.