Financial markets have entered a quiet, low-volatility phase, with trading volumes depressed by the Lunar New Year holiday in China and a lack of major macroeconomic catalysts. This has placed many assets, including precious metals, in a "wait-and-see" mode. Gold and silver volumes have hit yearly lows, yet the Commitment of Traders (COT) report for gold futures on the CME shows a new peak in net long positions by commercial traders, a medium-term bullish signal.
The primary market intrigue this week stems from escalating geopolitical risks. The United States has been rapidly building up its military presence in the Middle East, deploying two aircraft carriers and supporting assets, positioning for a potential large-scale strike on Iran. US President Donald Trump issued an ultimatum to Iran, demanding a nuclear deal within 10–15 days or face severe consequences. Tehran has threatened retaliatory strikes on US bases in the region if attacked.
This tension has provided a clear catalyst for safe-haven assets. While crude oil futures reacted more immediately, gold (XAU/USD) is experiencing steady, albeit not frenzied, buying flow as a hedge against potential US-Iran escalation. Technically, gold is recovering from a dynamic support zone between its 20 and 50-day moving averages, with a projected near-term target of $5,100, potentially extending to $5,200 within 1-2 weeks.
Silver (XAG/USD) has shown more pronounced bullish momentum, breaking above the upper boundary of its February descending channel. This breakout, fueled by the same geopolitical fears and safe-haven demand, suggests a potential move toward the key resistance zone between $87.5 and $95. The bullish case is further supported by an inverted head and shoulders pattern, with a sustained move above $79 and the psychological $80 level seen as reinforcing the uptrend.
Meanwhile, hawkish minutes from the Federal Reserve's latest meeting have cemented expectations for steady interest rates, contributing to US dollar strength and pressuring pairs like EUR/USD lower.
