In early Asian trading on Thursday, spot gold traded narrowly around $4,115 per ounce, extending the weak tone seen since the previous session. The core conflict for gold prices currently lies in the fact that safe-haven demand from geopolitical conflicts and the opportunity cost pressure of a high-rate environment are offsetting each other, leaving the precious metal unable to fall deeply yet also unable to form a smooth rebound, exhibiting a typical "ceiling above, floor below" tug-of-war.
Risk premiums at the geopolitical level continue to accumulate. Iranian Foreign Minister Araghchi said on Wednesday that while Iran remains firmly committed to seeking a dignified peaceful solution, it is also fully prepared for self-defense; President Pezeshkian noted that the United States should not expect dialogue with Iran while simultaneously imposing blockades and threats. These two statements expanded potential disruption risks from a single chokepoint to the entire Eurasian energy and shipping corridor, escalating market concerns about logistics chains.
However, the actual boost to gold from this safe-haven sentiment is being weakened by another logic chain: elevated oil prices push up US inflation readings through cost channels, thereby reinforcing the Fed's rationale for further monetary policy adjustments to curb price pressures. When inflation is driven by supply shocks, gold's anti-inflation narrative tends to be suppressed by tightening expectations, which is the fundamental reason gold has weakened even amid tense geopolitical conditions.
At the monetary policy level, market pricing is undergoing a subtle shift. Fed Chair Warsh last week avoided signaling the outcome of this month's policy meeting, but emphasized that higher-than-expected inflation has not changed his assessment of the US economy. According to the CME FedWatch tool, the probability of keeping rates unchanged at the October meeting is currently around 84%. Although holding steady next week is widely expected, the market is still pricing in another rate hike in December, keeping the policy outlook biased toward tightening. Higher interest rates typically weigh on gold because the precious metal pays no interest, making yield-bearing assets relatively more attractive. Additionally, elevated energy costs increase the likelihood that the US central bank will need further policy adjustments to control price pressures. For gold, this is a combination of "lacking near-term dovish catalysts, with medium-term rate suppression unresolved": as long as the year-end tightening path is not disproven, every rebound in gold prices may face resistance from profit-taking.
Cross-asset linkages are also sending bidirectional signals. European risk assets fell due to French political turmoil, while US Treasury yields rose as safe-haven demand receded; against this backdrop, the dollar strengthened slightly and commodity prices weakened in tandem. This combination indicates that risk appetite has not contracted across the board, which to some extent weakens gold's safe-haven buying momentum; meanwhile, the interest rate differential's support for the dollar exerts additional pressure on gold through the pricing channel. For gold, this is an environment of "safe-haven demand not collapsing, but the pricing side not cooperating," determining that gold prices are more likely to digest geopolitical premiums through range-bound trading rather than launching a smooth one-way rally.
Warsh's recent remarks scored 5.6/10, slightly below the historical average of 6.1/10, indicating his communication was milder than usual, though the overall tone remains constructive. He acknowledged being "too deeply traumatized by the global financial crisis," highlighting a cautious inclination toward financial stability even while emphasizing structural growth, investment surges, and AI as both a near-term demand-side force and a tool to strengthen confidence in data and monetary policy; at the same time, he declined to prejudge the October and December decisions. The FXS Fed Sentiment Index remained unchanged, still at a high level of 127.51, well above the neutral benchmark. This means that despite the lack of incremental signals from the speech, the overall policy narrative remains firmly in hawkish territory. For gold, this constitutes a persistent headwind: as long as the index stays above 127 and the year-end tightening path is not disproven, the real interest rate center is unlikely to decline systematically, and gold's rebound potential is correspondingly limited.
From a global market impact perspective, current gold price fluctuations are essentially the superposition of two independent logic chains: on one side, Middle East shipping disruptions and French political turmoil (with the French-German spread approaching a 24-year high) are boosting safe-haven demand, while central bank gold purchases and ETF holdings provide structural support for gold prices; on the other side, if oil prices continue to rise, they will further push up global inflation readings through cost channels, forcing central banks to extend the high-rate cycle, which in turn undermines precious metal valuations through the real interest rate channel. Therefore, it is not appropriate to simply equate geopolitical tension with bullish gold; instead, attention should be paid to the real direction of real interest rates and the dollar—only when inflation expectations diverge from real interest rates, or when the dollar weakens again due to diminished yield support, will the pricing-side boost for gold truly emerge.
On the daily chart, spot gold is trading below the 20-period Bollinger Band middle rail and the 100-day moving average, with short-term moving averages in a bearish alignment, and rebounds continue to be suppressed by the aforementioned resistance levels, with the medium-term bearish structure not yet repaired; however, prices remain above the Bollinger Band lower rail, suggesting a short-term bias toward consolidation rather than a full breakdown. RSI(14) is near 42.60, in neutral-to-weak territory, indicating downward momentum is still being released but not overextended, representing a typical weak consolidation pattern. Upside resistance is focused on the Bollinger Band middle rail around $4,160, the 100-day moving average around $4,230, and the Bollinger Band upper rail around $4,255, with these three levels forming a broad supply zone; only a daily close effectively above $4,160 would ease the current bearish bias. Downside support is first seen at the Bollinger Band lower rail around $4,070, a key near-term defense level; an effective break below could open deeper downside space, while holding this level would keep gold in a consolidating bearish range between $4,070 and $4,160.
On the 4-hour chart, gold prices have slowly consolidated along short-term moving averages after retreating from around $4,140, with the MACD histogram near the zero line and the fast and slow lines intertwining repeatedly, indicating neutral momentum; prices are currently oscillating narrowly between $4,100 and $4,140; a high-volume break below $4,110 could see prices seeking support at $4,090 or even $4,070; an upside breakout requires either a decline in real interest rates or an escalation in geopolitical tensions, and until then, a range-bound approach is advisable, avoiding chasing rallies or selling into declines.
Summary
The core conflict for gold in the near term is that geopolitical risk premiums provide bottom support, while the high-rate environment and a strong dollar compress upside space; their resonance determines that gold is more likely to repeatedly tug-of-war within the $4,070–$4,160 range. Going forward, three variables warrant close attention: first, the Strait of Hormuz transit situation and the evolution of Iran's statements, which directly determine the duration of safe-haven sentiment; second, US inflation data and the Fed's year-end policy path—if December rate hike expectations continue to heat up, real interest rate pressure will push gold to test support below $4,070; third, the direction of the dollar index—if the dollar weakens again due to diminished yield support, it will provide additional pricing-side support for gold. In the medium term, before the range is effectively broken, gold prices will maintain a consolidating and weak pattern, and confirmation of a trend direction still requires inflation data to set the tone and the central bank's year-end policy path to be finalized.
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