Gold hovers around $5,200, setting the stage for another weekly gain

The near-term bias remains mildly bullish to neutral on the 4-hour chart, as price continues to hold comfortably above the 100-period Simple Moving Average (SMA) near $5,039.

Immediate support is seen around $5,140, aligning closely with the 61.8% Fibonacci retracement at $5,141, measured from the $4,402 low to the the $5,598 all-time high. The 100-period SMA at $5,038 reinforces a stronger support zone beneath. A sustained break below $5,038 could expose the 50% retracement at $5,000 and weaken the current bullish structure.

On the upside, initial resistance is located in the $5,200-$5,250 region, followed by the 78.6% Fibonacci retracement at $5,342. Rejection near $5,342 would suggest fading upside momentum, while a decisive break above this level could open the door toward the $5,598 peak.

The Relative Strength Index (RSI) has eased to 55, retreating from overbought territory above 70, indicating cooling but still positive momentum rather than outright exhaustion.

The Average Directional Index (ADX) around 17 signals a weak trend environment, so upside progress would depend on fresh buying interest rather than strong trend continuation.

Gold FAQs

Gold has played a key role in human‘s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a countrys solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.