Gold retreats slightly from $4,900 neighborhood; bullish potential seems intact

Gold continues to scale new all-time peaks for the third consecutive day on Wednesday.
Trade war fears, geopolitical risks, and a spike in volatility benefit the safe-haven bullion.
The ‘Sell America’ trade should cap any USD recovery and favor the XAU/USD bulls.

Gold (XAU/USD) trims a part of its strong intraday gains to the $4,900 neighborhood, or a fresh all-time peak touched earlier this Wednesday. The US Dollar (USD) edges higher and looks to build on the overnight bounce from a two-week low, which, in turn, is seen as a key factor acting as a headwind for the commodity. However, the supportive fundamental backdrop favors bullish trades and suggests that corrective pullbacks are likely to be bought into.

US President Donald Trump’s threat to slap fresh tariffs on eight European countries that opposed his plan to acquire Greenland triggers a sharp rise in volatility amid persistent geopolitical uncertainties. This continues to weigh on investors’ sentiment and should act as a tailwind for the safe-haven Gold. Moreover, reviving ‘Sell America’ trade cap the USD recovery amid bets for further easing by the Federal Reserve (Fed) and support the non-yielding yellow metal.

Daily Digest Market Movers: Gold bulls seem unstoppable amid global flight to safety

Renewed trade frictions on the back of escalating tensions linked to Greenland rattle global markets and force investors to take refuge in traditional safe-haven assets, lifting the Gold price to a fresh record high on Wednesday.
US President Donald Trump said on Tuesday that there is no going back on his ambitious plan to acquire Greenland, citing security concerns in the Arctic, and argued that Denmark is unable to adequately protect Greenland.
Trump added that Greenland is imperative and threatened to impose tariffs on European allies. French President Emmanuel Macron stressed that respect and cooperation, not coercion, should define relations between allies.
As relations between the US and Europe remained strained over Greenland’s strategic importance, a sharp spike in bond yields rattled global markets and turned out to be another factor that benefits the precious metal.
Investors dumped the US Dollar amid the uncertainty, potential retaliation, and an acceleration of the de-dollarization trend. This provides an additional boost to the commodity and also contributes to the strong move higher.
Meanwhile, traders trimmed their bets for two more rate cuts by the US Federal Reserve in 2026 after Trump said last week that he would prefer to keep National Economic Council director Kevin Hassett in his current role.
This, however, does little to provide any respite to the USD bulls amid the dominant ‘Sell America’ trade. Traders now look forward to the release of the US Personal Consumption Expenditure (PCE) Price Index on Thursday.
The crucial inflation data will be accompanied by the final US Q3 GDP growth report, which could offer more cues about the Fed’s future policy path. The outlook, in turn, will drive the USD and the non-yielding yellow metal.

Gold could pause for a breather amid extremely overbought conditions

The latest leg up confirms a fresh bullish breakout through the top end of the month-to-date ascending channel. A subsequent strength beyond the $4,800 mark validates the constructive outlook and backs the case for an extension of the well-established uptrend. The Moving Average Convergence Divergence (MACD) line extends above the Signal line, with both above zero, reflecting strengthening bullish momentum; the positive histogram widens, reinforcing the upbeat tone.

The RSI at 81 (overbought) warns of stretched conditions that could cap near-term follow-through and invite consolidation. Should momentum cool while MACD holds in positive territory, buyers would be expected to show interest near the channel support, which, in turn, should contain corrective pullbacks. Conversely, a sustained positive MACD profile and an RSI remaining above 70 would keep buyers in control and extend the appreciating move.