Gold Outlook: XAU/USD Attempts to Hold Above $5,000

Recent sessions have not been particularly strong for gold in the short term. Over the last three trading sessions, XAU/USD has gained only 2.25%, showing that while an attempt at recovery is underway, neutrality has begun to take the lead as the dominant short-term bias.

For now, gold’s prevailing indecision persists despite ongoing geopolitical tensions in the Middle East. This is partly due to limited activity within the gold market and partly because substitute assets may be beginning to draw attention away in the short term. Unless new fundamental developments emerge that meaningfully boost demand, indecision may continue to dominate gold’s price action in the coming sessions.

The Safe Haven Struggles to Maintain Appeal

Although gold is traditionally considered a premier safe-haven asset, it is currently not being perceived as fully attractive by the market. This comes despite the continued escalation of strategic attacks and military tensions in the Middle East, as well as ongoing threats that make a near-term peace agreement increasingly unlikely.

While confidence indicators have declined significantly, the Fear and Greed Index is now around the 30-point area, approaching “extreme fear” territory. However, this has not been sufficient to sustain consistent demand for gold in recent sessions, as markets appear to be favoring alternative safe-haven assets in the short term.

Source: CNN

Indeed, the lack of consistent demand is visible in metrics such as net flows in the SPDR Gold Shares ETF, where steady capital outflows were recorded during the week of March 6. On March 4 alone, outflows exceeded $2.9 billion. For now, it appears that the Middle East conflict, rather than benefiting gold, has acted as a catalyst that has weakened the demand that had been building in previous months.

Source: ETFBFD

In this context, current geopolitical tensions may be contributing to a reduced interest in gold as a short-term safe haven. Confidence and capital may be shifting toward key substitute assets, diminishing gold’s activity and appeal and potentially sustaining a more consistent phase of indecision in XAU/USD price action.

 

Bonds Are the Main Rival

One substitute market that is also considered a short-term safe haven and serves as an alternative to gold is US Treasury bonds. Although no extreme moves have been observed in recent sessions, it is important to note that the yield on the 10-year Treasury has risen consistently over the past two weeks, reaching levels near 4.1%, with sustained moves not seen since January and maintaining a positive short-term slope.

Source: TradingEconomics

What makes this scenario relevant is that a more attractive interest rate environment in the bond market may increase preference for Treasuries over other safe-haven assets such as gold. Since gold does not generate fixed income, it may be losing ground to fixed-income markets in an environment of rising yields amid geopolitical tensions. This helps explain why capital appears to be favoring bonds as a short-term safe-haven alternative. As long as yields remain firm, indecision in gold’s price movements could persist in the coming sessions.

 

Technical Outlook for Gold

Source: StoneX, Tradingview

• Uptrend Remains Relevant: For several months, gold has maintained a relevant upward trendline in its average price movements. In the absence of deep bearish corrections, this remains the most important technical pattern to monitor in the short term and may continue to dominate upcoming price movements. However, recent sessions have begun to reflect a more evident neutral bias. If this pattern persists and buying pressure fails to stabilize upward momentum, a short-term sideways range may begin to develop in gold’s price action.
   

• RSI: The RSI currently fluctuates near the neutral 50 level, suggesting that average buying and selling momentum over the past 14 sessions remains balanced. If this behavior continues, the phase of indecision may remain relevant in the short term.
   

• MACD: The MACD histogram also remains near the zero level, reflecting indecision in short-term moving average momentum and reinforcing the current sense of neutrality in gold’s price movements.
   

Key Levels to Watch:

• $5,400 – Key Resistance: A psychological level near historical highs. A sustained move toward this area could consolidate dominant buying pressure and extend the uptrend in the coming weeks.
   
• $5,000 – Near-Term Barrier: A psychological level that has recently generated neutrality. As long as price does not move decisively away from this zone, a short-term sideways range may persist, potentially leading to a more extended phase of indecision.
   
• $4,843 – Critical Support: An area aligned with recent lows, the primary upward trendline, and the 50-period simple moving average. A sustained break below this level would threaten the current bullish structure and could activate a more dominant selling bias.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25