Key Drivers In Todays Trade
Crude oil pulled back after a rally to its highest level since June 2022. The drop followed comments from US President Donald Trump suggesting the Middle East war could end soon. The Wall Street Journal reported that the International Energy Agency has proposed the largest release of oil reserves in its history. The plan aims to lower crude prices during the US-Israel conflict with Iran. Fighting continued, with Iran facing heavy US-Israeli strikes on Tuesday. The IRGC said it was expanding operations and targeting technological infrastructure in the region. Traders awaited US CPI data due later on Wednesday. Attention then turns to the US PCE Price Index on Friday.Technical Snapshot And Key Levels
Technically, gold broke above the rising 100-hour SMA but lacked follow-through. MACD (12, 26, close, 9) stayed below its signal line, while RSI (14) fell from above 70 to the mid-50s. Resistance was cited near $5,228, then $5,260. Support levels were $5,190, $5,160, and $5,140. With Gold pulling back below $5,200, we see this as a temporary pause before the next move higher. All eyes are on the US Consumer Price Index (CPI) report due later today, which will heavily influence the Federal Reserve’s path on interest rates. Any signs of a corrective dip towards the $5,190 support level should be viewed as a potential entry point for long positions. We should consider buying call options or selling cash-secured puts to capitalize on the underlying bullish trend. The ongoing conflict between a US-Israeli coalition and Iran provides a strong geopolitical floor for gold prices, acting as a safe-haven asset. This backdrop suggests that sharp drops are unlikely to last long as long as military tensions remain high in the Middle East. Looking at recent data, the trend supports this view. The February 2026 CPI report showed inflation easing to 2.8% year-over-year, and the market, according to the CME FedWatch tool, is pricing in over a 70% probability of a Fed rate cut by June. We saw a similar dynamic in early 2022 after the invasion of Ukraine, when gold rallied over 10% in just a few weeks on the back of geopolitical uncertainty and shifting central bank expectations. The sharp retreat in crude oil prices further strengthens our bullish conviction for gold. After the International Energy Agency proposed a massive release from strategic reserves, oil prices have fallen significantly, easing concerns that a war-driven energy spike would reignite inflation. This gives the Federal Reserve more flexibility to proceed with anticipated interest rate cuts, which is fundamentally positive for non-yielding gold. However, the primary risk remains a surprisingly high inflation number from today’s CPI release. A hot print would challenge the rate cut narrative, likely strengthening the US Dollar and pushing gold down toward the more critical $5,160 support zone. To manage this event risk, traders could wait until after the data is released to initiate new positions or purchase short-term put options to hedge existing long exposure. Create your live VT Markets account and start trading now.
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