XAU/USD is pulling back from its recent highs and is now testing a key support area near the 5,000 handle.
Gold has been getting extra attention lately as traders weigh rising geopolitical risks in the Middle East, including the ongoing conflict involving Iran and fresh attacks that have raised worries about energy supply and shipping through the Strait of Hormuz.
That kind of uncertainty can keep safe-haven demand in play, even when higher yields and a firmer dollar try to cap upside.
Will this zone hold and attract new demand?
Here’s what we’re seeing on the daily time frame:
XAU/USD Daily Chart | Chart Faster with TradingView
Gold has been riding a strong trend higher, but it can still see sharp pullbacks when traders take profit or when U.S. yields and the dollar firm up.
On the other hand, any return of market nerves can keep gold supported, since it tends to benefit when investors want safety.
With XAU/USD back near a big level, will buyers step in to defend support, or is this the start of a deeper correction?
Key price action and levels
XAU/USD, which printed a sharp spike higher in early February, has since cooled off and drifted lower from the 5,200 to 5,400 area as upside momentum faded.
As you can see, price is now sliding into the 5,000 support zone, which lines up closely with the 50 SMA (around 4,967) and the big round-number level traders tend to watch.
If XAU/USD can hold above the 5,000 area and climb back above the nearby swing levels, it would strengthen the case for a bounce toward 5,200, with 5,400 and the prior highs near 5,600 back on the radar.
However, if sellers stay in control and we see a decisive break below the 5,000 support zone, the next area to watch could be around 4,800, followed by the lower support zones around 4,400 to 4,200 if the pullback picks up steam.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay alert for top-tier catalysts that can move gold, the dollar, yields, and overall market mood.
