“If gold briefly trades above that level and then pulls back, it would suggest short-term hedging activity. However, if prices break above $5,600 and remain above it with sustained buying interest, it would signal a more structural shift toward a ‘haven-first’ positioning.”
The levels traders will watch first
Other strategists framed the opening move in terms of immediate resistance zones that could define the session.
Michael Brown, senior research strategist at Pepperstone, said the market is primed for a defensive tilt at the open, with two levels likely to draw attention quickly.
“I think it’s pretty clear that gold will gap higher at the open later on today, as participants de-risk and seek a safe haven in reaction to this weekend’s geopolitical events.”
He added, “I’d flag $5,400/oz followed by the late-Jan record high at $5,595/oz as the key levels to watch to the upside.”
Vijay Valecha, chief investment officer at Century Financial, pointed to a slightly lower confirmation band for whether the move becomes more strategic.
“Gold is likely to start Asia trading with a strong jump, reflecting rising geopolitical tensions and a shift toward safer assets. Weekend prices around $5,430, up about $136, show that markets are entering the week more cautiously.”
He said, “If gold stays above $5,450 to $5,500, it would point to a move from short-term hedging to a longer-term safe-haven strategy.”
Dollar and yields may matter less in the first hours
Early trading in gold often leans on the usual relationships with the US dollar and Treasury yields, though strategists expect the first phase of this move to be driven more by positioning and risk appetite than clean macro correlations.
Yakout said gold can rally even when the dollar is firm during acute shocks, with real yields doing more of the heavy lifting.
“In the first hours of trading, gold’s direction will likely be driven primarily by safe-haven demand rather than traditional correlations.”
He added, “The more important macro factor will be real Treasury yields. If investors rush into bonds and real yields decline, the opportunity cost of holding non-yielding gold falls, making bullion more attractive.”
Charu Chanana, Chief Investment Strategist at Saxo Bank echoed that dynamic and pushed back on the idea that markets must choose between the dollar and gold.
“Safe-haven demand can lift both the US dollar and gold. It’s not either or.”
Valecha also linked the durability of gold’s gains to what happens in real yields once markets start pricing the inflation channel through energy.
“Gold may jump at first due to geopolitical fears, but lasting gains depend on whether real yields fall.”
He added, “If Treasury yields drop while inflation expectations stay high because of rising energy prices, real yields will weaken further, which usually supports gold.”
ETF flows could be the early confirmation
Beyond spot price action, strategists said flows may offer a cleaner read on whether this turns into a broader reallocation.
Yakout said institutional investors are likely to use ETFs to move quickly at the start of the week.
“Immediate inflows into gold ETFs are highly probable as institutional investors rebalance portfolios in response to heightened risk.”
Valecha expects a similar pattern, particularly from portfolios that adjust risk based on volatility and macro stress.
“Yes, gold ETFs will probably see quick inflows when markets reopen, especially from tactical investors and risk-parity strategies seeking fast exposure to defensive assets.”
A larger shift, several strategists said, comes when the narrative moves from pure risk-off into inflation anxiety tied to energy.
Chanana said, “A bigger shift tends to come if the story morphs from ‘risk-off’ into oil-driven inflation anxiety, because that raises the appeal of gold as a hedge against policy uncertainty and longer-lasting inflation risk, not just market volatility.”
Spike now, then consolidation, or something bigger
Gold’s pattern during geopolitical shocks often follows a familiar arc, an initial surge, then some give-back once the first wave of fear trades is absorbed. Several strategists expect that risk to remain on the table in the days ahead even if prices open strongly.
Brown cautioned that early extremes can fade once positioning stabilises.
“I’d not be at all surprised to see some degree of any initial spike higher fade as trade progresses.”
Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation, and the big shifts shaping life in the Gulf. Before returning to Gulf News, she launched Finance Middle East, complete with a podcast and video series.
Her reporting has taken her from breaking spot news to long-form features and high-profile interviews. Nivetha has interviewed Prince Khaled bin Alwaleed Al Saud, Indian ministers Hardeep Singh Puri and N. Chandrababu Naidu, IMF’s Jihad Azour, and a long list of CEOs, regulators, and founders who are reshaping the region’s economy.
An Erasmus Mundus journalism alum, Nivetha has shared classrooms and newsrooms with journalists from more than 40 countries, which probably explains her weakness for data, context, and a good follow-up question.
When she is away from her keyboard (AFK), you are most likely to find her at the gym with an Eminem playlist, bingeing One Piece, or exploring games on her PS5.