Gold continued its recovery in the latest session, marking a second consecutive gain and advancing to around $4,120per ounce.
This was not the first time buying interest emerged as prices approached the $3,950–$4,000 area.
During several recent pullbacks, gold repeatedly rebounded from this zone, suggesting that the $4,000 level is becoming an increasingly important psychological and technical support area. It also indicates that investors remain willing to buy the metal when prices fall sharply.
The immediate drivers behind the latest recovery were a relatively weaker U.S. dollar and renewed technical buying following the previous correction. In yesterday’s session, gold briefly climbed to $4,165.87 per ounce, its highest level in around two weeks, as bargain hunters returned and the dollar lost some momentum.
The rapid recovery above $4,100 suggests that selling pressure has eased significantly compared with the previous week.
However, the current advance does not necessarily mean that gold has returned to a sustainable bullish trend. The market continues to be influenced by two opposing forces. On the one hand, tensions in the Middle East and risks surrounding energy transportation continue to strengthen gold’s safe-haven appeal. On the other hand, those same tensions are pushing oil prices higher, raising inflation concerns and increasing the likelihood that the Federal Reserve may need to keep interest rates elevated for longer. This tension helps explain why gold does not always rise when geopolitical risks intensify.
In addition, the yield on the two-year U.S. Treasury has risen to around 4.30%, while the ten-year yield has approached 4.66%, close to its highest level of 2026. With both real and nominal yields remaining elevated, investors tend to become more cautious toward gold, particularly when the U.S. dollar is also strengthening.
For this reason, next week’s Federal Reserve meeting will be especially important. Markets will not only focus on the interest-rate decision, but also on how the Fed assesses the inflationary impact of higher energy prices. If policymakers view the oil shock as temporary and see no immediate need for further tightening, the dollar and Treasury yields could ease, creating more room for gold to extend its recovery. Conversely, a more hawkish message regarding inflation risks could quickly limit the current upside.
In the near term, gold may extend its recovery toward $4,200 if buying momentum continues to strengthen, opening the door to higher price levels. A successful break above $4,200 would also confirm that the current move is more than merely a technical rebound. On the downside, if momentum weakens and prices once again test the $3,950–$4,000 area, it would suggest that buying interest at lower levels has not yet been strong enough to alter the medium-term structure. A break below this zone could expose gold to a deeper pullback.
Overall, gold’s repeated rebounds from the $3,950–$4,000 area show that buying interest remains present at lower levels and that this zone continues to act as an important support base. However, the fact that prices have repeatedly returned to test the same area also suggests that the underlying support is not yet fully secure. Against this backdrop, the short-term outlook is slightly tilted toward further recovery, but gold still needs to break above the $4,165–$4,200 region to confirm that buyers have genuinely regained control.
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