Gold Update: Is XAU/USD becoming a safe-haven asset again?

The last two trading sessions have been important for gold. The precious metal has gained more than 3.5% during this period, showing renewed short-term bullish momentum.

For now, buying pressure has held as new tensions in the Middle East continue to support demand for safe-haven assets. This dynamic could be favoring stronger demand for gold and, if it continues, may keep supporting its movements over the next few trading sessions.

Is the Middle East conflict having an impact again?

Over the last few sessions, reports showed that Iran attacked a tanker in the Strait of Hormuz, while the United States carried out another round of airstrikes against Iran amid tensions over control of this key maritime route for global trade.

In addition, Iran has stated that no concrete negotiations are taking place while the conflict continues, while the United States has said that Iran is not maintaining a serious stance to reach a possible diplomatic solution in the short term.

This scenario continues to generate uncertainty around global risk appetite. WTI crude oil has already moved above the 85-dollar area in the short term, driven by the conflict, which indicates that the risk premium remains elevated. This situation could also revive concerns about possible global inflationary pressure over the coming months.

In fact, a dynamic that had not been so evident for several months has started to appear. During previous sessions, new escalations in the Middle East conflict have been accompanied by higher volume in the gold futures market. Between July 20 and 21, the volume of traded contracts increased. Up to the latest date with available data, volume reached nearly 153 thousand contracts, while open interest, which measures the total number of open buy and sell positions, also rose toward levels close to 383 thousand contracts.

This combination of higher volume, rising gold prices and increasing open interest may suggest the entry of new long positions into the futures market. In this context, current demand appears to be following the events in the Middle East, which could indicate that gold is once again being considered a short-term safe-haven asset.

Source: CMEGROUP

It is also interesting that this renewed demand for gold has appeared in a context where the 10-year U.S. Treasury yield continues to rise. Now, the yield maintains an upward slope and is already above the 4.6% area in the short term.

In previous weeks, increases in Treasury yields used to pressure gold, since bonds pay interest while the precious metal does not. However, this relationship has not behaved the same way in recent sessions.

This could reflect broader demand for safe-haven assets, in an environment where the escalation in the Middle East shows no clear signs of easing. For this reason, at least in the short term, gold may be regaining some of its safe-haven appeal, something that had not been seen so clearly for several months.

Source: TradingEconomics

With all of this in mind, gold could be seeing renewed demand for two main reasons. First, the market may consider that the decline seen in previous months was enough, opening room for a partial recovery in the precious metal. Second, persistent tensions in the Middle East are keeping uncertainty elevated and may be extending the risk premium toward other traditional safe-haven assets, beyond the dollar and Treasury bonds.

If this relationship continues, gold could keep finding support in the short term. For that reason, more consistent buying pressure could remain in place over the next few trading sessions.

 

Technical forecast for gold

Source: StoneX, Tradingview

• Bearish trend enters a risk zone: For several months, gold has maintained a major bearish trend line, which has so far remained the most important technical structure on the daily chart. However, the recent price recovery has started to challenge the base of this trend. If buying pressure manages to hold, the bearish line could start to lose relevance. In that scenario, the chart could enter a more neutral phase or even begin to show a stronger buying bias over the next few sessions, reducing the strength of the selling bias that dominated for months.
   

• RSI: Now, the RSI line has started to move close to the neutral 50 level. This suggests a balance between bullish and bearish impulses over the last 14 sessions. This dynamic reflects a possible indecision bias that has started to become relevant on the chart and could continue if the indicator maintains this behavior.
   

• MACD: The MACD shows a similar reading, as the histogram remains close to the neutral 0 area. This suggests that the average strength of short-term moving averages is in balance, reinforcing the possibility of an indecision phase in gold.
   

Key levels to watch:

• 4,341 USD – Crucial resistance: This relevant high from recent weeks is located above the 50-period simple moving average and near the 23.6% Fibonacci retracement of the most important move on the chart. Price movements toward this level could put the major bearish trend line at risk and open room for a more dominant buying bias over the coming trading weeks.
   
• 4,185 USD – Near-term barrier: This recent neutral zone coincides with important retracements from recent weeks. If price remains too close to this level, an indecision phase could be reinforced and even open room for a short-term sideways range, which would also start to reduce the importance of the major bearish trend line on the chart.
   
• 3,886 USD – Critical support: This level is associated with relevant lows from October 2025 and is considered the next most important bearish barrier. Moves toward this area could bring a clearer selling bias back into focus and extend the bearish trend line as the dominant technical structure over the coming weeks.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25