Gold rallies: Long-awaited rise and growing safe-haven demand

RoboForex Analysis Department RoboForex

Gold rose to 4,400 USD per ounce on Tuesday, reaching a two-month high. Demand for the precious metal is growing rapidly, even amid heightened inflation risks and expectations of higher interest rates driven by elevated oil prices.

Chinese institutional investors continue to build positions in gold as a defensive asset amid heightened volatility in other markets. China’s gold-backed ETFs are recording their longest run of inflows in months.

The People’s Bank of China is also supporting the market. In July, the regulator increased its gold reserves by approximately 20 tonnes, following an increase of around 15 tonnes in June – the largest monthly addition since October 2023.

At the same time, uncertainty persists around a potential US–Iran agreement that could end the conflict and reopen the Strait of Hormuz. Investors are also awaiting key US inflation data this week, which could shift expectations for future Federal Reserve policy.

Technical analysis

On the H4 XAU/USD chart, the market formed a consolidation range around the 4,341 USD level and, following an upside breakout, moved higher to 4,435 USD. A consolidation range is now forming below this level. A move lower towards 4,370 USD is expected next, with a possible extension to 4,340 USD. A further rise towards 4,575 USD is anticipated as the local upside target. The MACD indicator signals the early stages of bearish momentum, with its signal line above the centre line at recent highs and beginning to turn downwards.

On the H1 chart, the market broke above the 4,371 USD level and moved higher to 4,435 USD, followed by a correction to test 4,371 USD from above. A broad consolidation range is forming around 4,371 USD. A move higher towards 4,460 USD is expected, followed by a decline to 4,371 USD. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards towards 20, indicating increasing short-term downside pressure.

Conclusion

Gold has rallied to a two-month high, driven by robust demand from Chinese institutional investors and the People’s Bank of China’s continued reserve accumulation. Despite rising inflation risks and expectations of higher interest rates, the metal’s appeal as a defensive asset has strengthened amid market volatility. Uncertainty over a potential US–Iran agreement and the outlook for the Strait of Hormuz, along with upcoming US inflation data, continues to keep markets on edge. Technically, gold may see a short-term pullback towards 4,340–4,370 USD before potentially resuming its uptrend towards 4,575 USD. The metal’s near-term direction will depend on geopolitical developments and US monetary policy expectations.

Author

RoboForex Analysis Department

RoboForex

RoboForex Analysis Department provides timely market insights, expert technical analysis, and actionable forecasts across forex, commodities, indices, and equities.

AUD/USD treads water above 0.7000 ahead of the RBA

AUD/USD alternates gains with losses just above the 0.7000 yardstick ahead of the opening bell in Asia on Tuesday. The pair’s decline follows the Greenback’s decent advance in a context of heightened geopolitical effervescence. Moving forward, the RBA is expected to hike its OCR to 4.60%.

USD/JPY climbs back toward 158.00 after BoJ minutes amid firm USD

USD/JPY finds dip-buyers and reverses part of Friday's slide driven by speculation that authorities will step in again to prop up the Japanese Yen. However, the BoJ's dovish Minutes cap the JPY. Meanwhile, the US Dollar regains traction as the US-Iran standoff supports crude oil prices, fueling inflation fears and reaffirming bets for an October Fed rate hike. This further supports the pair, driving it back toward 158.00.

Gold tumbles further; focus shifts to $4,100

Gold kicks in the week on the back foot, selling off to the vicinity of the $4,100 mark per troy ounce, levels last traded back in early August. The resurgence of geopolitical concerns in combination with the firmer US Dollar and rising US Treasury yields keep the yellow metal under heavy pressure on Monday.

Strategy buys 1,665 Bitcoin amid renewed geopolitical tensions

Bitcoin (BTC) dropped below $84,000 on Monday as Strategy (MSTR) announced a fresh treasury purchase of $143 million last week, boosting its holdings to 847,666 BTC. The company purchased 1,665 BTC for roughly $142.7 million, according to a filing with the Securities and Exchange Commission (SEC) on Monday.

The week ahead: A key moment for the global economy as threats rise

UK diesel hits a record, as economic concerns rise. The market expects an aggressive Fed rate hiking cycle, but is it necessary? Oil supply concerns ease, even as oil prices rise. What’s next for the AI trade.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.