Gold Cuts Losses Alongside Risk Assets as Trump Signals De-Escalation

• Gold rebounded sharply as markets reacted to signals of potential de-escalation.
• Trump’s comments shifted sentiment, but conflicting narratives keep uncertainty elevated.
• Key technical levels now determine whether this move develops into a broader recovery.

Gold has staged a notable rebound alongside broader risk assets, after yet another market-moving intervention from Donald Trump.

In the space of a couple of hours, sentiment shifted quite dramatically. Trump took to social media to claim that the US and Iran had held “very good and productive conversations” aimed at resolving tensions in the Middle East. On the back of that, he announced a five-day postponement of any planned military action targeting Iran’s energy infrastructure, pending further talks.

That said, the situation remains far from settled. Iran was quick to push back, denying that any such discussions had taken place and accusing Washington of stalling. Even so, markets have chosen—for now at least—to focus on the potential for de-escalation. Prices have lifted off their earlier lows, and risk appetite has improved. Whether that holds is another matter entirely, but the immediate reaction has been clear: sentiment has flipped, and once again Trump appears to be steering the ship.

Gold Technical Analysis

Turning to gold’s chart, the metal had been under sustained pressure coming into today’s session, falling in eight of the previous nine days. The only pause in that decline came last Tuesday, when prices briefly stabilised above the $5,000 mark. Today’s rebound raises the question of whether a more meaningful turning point might now be forming.

The recent sell-off has been technically significant. A succession of support levels gave way, accelerating downside momentum and triggering further selling. In the process, gold has wiped out the entirety of its gains from the past three months. The rallies seen through December, January and February have been fully unwound, and earlier in the session even November’s gains were starting to come under threat.

However, today’s sharp reversal offers a glimmer of hope that a base may be forming—at least in the near term.

From a technical perspective, the picture remains mixed. Intraday momentum has turned positive, but the broader trend still leans bearish. As such, it makes sense to approach this market incrementally, watching how price behaves at key levels rather than assuming a full reversal is already underway.

Key Levels to Watch

In terms of levels, the $4,400 area stands out as initial support. This was the February low and, under normal circumstances, might have been expected to act as resistance on the way back up. That it failed to do so during today’s V-shaped recovery is notable. On the topside, $4,477 is the next level to watch. This marks Friday’s low and was breached overnight, prompting a sharp leg lower. A sustained move back above this level would begin to stabilise the outlook and could open the door to a broader recovery.

On the downside, the landscape is less clearly defined following the recent breakdown. The next major reference point sits at $4,000—a key psychological level. Prices came within roughly $100 of this threshold earlier today before bouncing, underlining its significance in the near term.

What to Make of all the Volatility?

From a macro standpoint, the backdrop remains somewhat unfavourable. A stronger US dollar, firmer bond yields and generally fragile sentiment are not typically conducive to gold strength. Moreover, in periods of acute geopolitical stress, we often see indiscriminate selling across asset classes—including precious metals—which can blunt gold’s traditional safe-haven appeal in the short run.

For a more sustained recovery to take hold, some tangible easing in geopolitical tensions would likely be required. Today’s bounce is an encouraging start, but it will need to be backed by follow-through. If rhetoric continues to soften in the days ahead, that could weigh on the dollar and ease yields—conditions that would provide a more supportive environment for gold to rebuild.

***

Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

Read my articles at City Index