Gold prices increased above 3100, rebounding from a drop below 3000. The current level of XAU/USD is approximately 3123, according to FX analysts.
The recent sell-off was attributed to broad liquidations across various asset classes. Amid growing tariff threats and changing global trade norms, gold continues to serve as a hedge during uncertain times.
Gold As A Strategic Hedge
As protectionist sentiments rise, markets are adjusting to increased policy uncertainty. Gold is viewed as a strategic hedge against inflation, geopolitical fragmentation, and potential disruptions in the global economy.
Bearish momentum on the daily chart has subsided, with resistance at 3167 and support levels at 3048 and 2960.
This recent climb in gold prices, pushing above the 3100 mark after a brief dip under 3000, signals a clear shift in short-term sentiment. The move appears to follow a period of asset-wide selling, which saw participants exiting risk and non-risk positions alike, not necessarily due to weakness in individual markets, but more likely in search of liquidity amidst policy turbulence.
Positioning has become difficult to interpret solely through surface-level price action. What we’ve seen lately is less about the metal’s intrinsic value and more about its role as a financial shelter. Gold tends to become attractive again when traders face blurred macro signals and interruptions in predictable trading flows. The recent uptick suggests that confidence in traditional assets waned, prompting capital rotation.
Protectionist Trade Discourse
Analysts have noted that protectionist trade discourse is now shaping expectations beyond just equity or fixed-income strategies. With tariff-related rhetoric gaining momentum, particularly from large economies repositioning their trade alignments, inflation outlooks remain inconsistent. That has quietly brought the idea of hard assets back into active consideration. For us, it means rethinking risk models which remain overly reliant on assumptions of stability.
Technically, we’re observing that the earlier downtrend has, for now, lost steam. Sellers no longer appear to dominate directional bias, at least on daily intervals. Resistance stands at 3167 and will be in focus for momentum strategies. Until there’s a clean break above, the upside has limited breathing room. However, unless buyers lose confidence quickly, we may not revisit deep supports around 2960.
Support bands between 2960 and 3048 have held well through the last round of liquidation, leaving a reasonably defined cushion below. If prices begin to retrace again in the near term, this area offers a read for trend validation — whether we are simply cycling through volatility or staging a reversal.
We’re watching closely how flows move in related derivatives. Volume in call spreads has picked up after weeks of low engagement, suggesting participants may no longer expect retracement to continue in a straight line. Dealers are likely to adjust hedge ratios based on levels approaching 3167, which puts pressure on short-dated vol products.
With options pricing still elevated compared to historical norms, implied ranges may remain wide but necessary. Hedging against headline risk looks costly but is increasingly being framed as a tactical expense, especially for those sitting on longer-duration positions. Any clarity from central policy authorities in the next fortnight could offer brief relief, but traders have already priced in some level of ongoing friction.
No technical pattern suggests a runaway rally here, though the break back above 3100 will keep short strategies cautious. If spot holds near these levels for multiple sessions, that may trigger wider exposure shift across gold-backed instruments, especially those layered with derivatives that roll monthly.
We’re adjusting our frameworks to focus on evidence-based trend continuation, rather than chasing moves that may still be noise following last week’s liquidation. In short-term derivatives, it may be time to look more at pricing dislocation around known resistance than trying to fight the broader sentiment tailwinds.
