Gold retreats from highs as US – China tensions and global risks support safe-haven demand

Gold (XAUUSD) pulled back from recent highs as global risks intensified, but safe-haven demand remains strong. Markets reacted to escalating U.S.–China trade friction, new sanctions on Russian energy firms, and disappointing results from major tech companies. These developments triggered defensive positioning across markets. Gold’s upward momentum paused on Dollar strength, though the larger macro setup still supports the bullish case. As global financial markets face renewed instability, gold remains well-positioned as a strategic hedge in an uncertain environment.

Gold pulls back as US–China trade friction and geopolitical risks intensify

Gold has declined from its peak, reflecting growing caution and a shift in market positioning. Despite the pullback, safe-haven demand remains strong following a wave of adverse developments. Markets reacted to reports that the U.S. may impose new export restrictions on software-driven products bound for China. The decision intensified trade friction following China’s rare earth export restrictions.

Furthermore, geopolitical risks intensified after the U.S. imposed sanctions on Russian oil companies due to a lack of progress in ending the war in Ukraine. These developments triggered risk-off flows across global markets. Meanwhile, weak earnings from major tech companies added pressure. Tesla missed profit expectations, Netflix issued a gloomy outlook, and Apple declined after facing an antitrust complaint in the EU.

Consequently, the U.S. Dollar regained strength as investors moved to safety following a rise in global risks. This recovery capped gold’s short-term upside. Still, the broader macro environment remains supportive of gold. Attention now turns to Friday’s U.S. CPI report, which could shape near-term expectations. Additionally, markets have largely priced in next week’s expected Federal Reserve rate cut. Despite these short-term headwinds, gold may regain traction if macro and geopolitical risks persist.

Gold tests extension resistance after breaking out of long-term channel

The gold chart below shows a sustained uptrend contained within a well-defined ascending channel that began forming in late 2023. The rally gained strength in 2025, lifting gold beyond the $4,000 milestone for the first time. After a sustained climb, price action reached the upper extension near $4,400, a key resistance zone that triggered a brief pullback. The overall trend remains constructive, as gold stays above the upper portion of the channel, signaling sustained underlying demand.

Moreover, the chart reflects a series of strong weekly closes, confirming the persistence of upward pressure. Each dip has been limited in scope and quickly recovered, indicating steady buying pressure. The lack of significant breakdowns confirms the durability of the trend. The latest retreat appears to be a short-term response to Dollar strength rather than a structural shift. As long as gold holds within the upper range of the ascending channel, the broader bullish outlook remains intact.

Furthermore, renewed geopolitical tensions could drive gold back toward the $4,400 extension zone or beyond. On the downside, the $3,850–$3,900 area remains key support, aligning with the former resistance of the ascending channel. A successful retest of this level would validate the breakout structure. If macro conditions worsen, gold may resume its advance and break to new highs in the coming months.

Gold outlook: Bullish structure holds despite Dollar strength and market volatility

Gold remains in a strong long-term uptrend, supported by a well-established technical structure and a steady flow of safe-haven demand. The recent pullback reflects short-term Dollar strength and changes in market positioning, yet the broader macro backdrop still favors gold. Escalating trade tensions, rising geopolitical risks, and uncertainty around inflation and policy outlooks keep gold well-positioned as a strategic hedge. If macro pressures intensify, gold may resume its advance and break to new highs in the coming months.

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