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Gold (XAUUSD) is gaining strength as global instability and Fed uncertainty drive renewed demand for safe-haven assets. The price has reclaimed ground above $5,000 following a sharp recovery. Rising geopolitical tensions in the Middle East and the U.S. government's cautious policy stance are shaping market sentiment. At the same time, the nomination of a hawkish Fed Chair and ongoing data disruptions have clouded the monetary outlook. These factors are providing a supportive backdrop for gold’s continued advance.

Gold Rises on Geopolitical Risk and Fed Policy Uncertainty
 

Gold is regaining upward momentum, with price now trading above the $5,000 level as geopolitical tensions intensify. CNBC reported that the U.S. military intercepted an Iranian drone that aggressively approached the USS Abraham Lincoln in the Arabian Sea. This development has added to the already fragile environment in the Middle East. The risk of U.S. military escalation is supporting gold’s appeal as a geopolitical hedge.

Diplomatic challenges have further complicated the backdrop. Reports indicate Iran is insisting on holding discussions with the U.S. in Oman and restricting the agenda to nuclear issues. This demand disrupted ongoing efforts and highlighted the lack of trust between the two parties. Any sign of escalation or stalled diplomacy could offer continued support to gold as global uncertainty deepens.

At the same time, the nomination of Kevin Warsh as the next Fed Chair has influenced market expectations. Warsh is viewed as hawkish, signaling a potentially slower path to interest rate cuts. As a result, markets reduced the probability of a March cut, but still price in a 66% chance of easing by June. The Fed’s cautious tone, combined with the shutdown’s disruption to key data, keeps monetary policy in a holding pattern. This backdrop continues to support gold.

Gold Sustains Uptrend Within Expanding Wedge After Triangle Breakout
 

The gold chart below shows a decisive long-term breakout from an ascending triangle formation that developed between 2019 and 2024. Throughout this period, price repeatedly tested resistance near the $2,075 level while forming a series of higher lows. The eventual breakout occurred in early 2024, confirming the pattern and marking the start of a sustained uptrend.
 

Following the breakout, gold surged into a steep broadening wedge, defined by two expanding red trendlines. The rally accelerated sharply in 2025, with price climbing from the $2,000 range to over $5,000. Each pullback during this move found support along the lower boundary of the wedge, signaling trend strength and continued bullish momentum. A brief spike beyond the upper boundary signaled overextension but was quickly followed by mean reversion.

The spike above $5,500 reflected a brief acceleration in upside momentum. After slipping below $5,000, the price quickly recovered and is now holding near the $5,060 level. The broader uptrend remains intact, supported by the confirmed breakout structure and a clear sequence of higher highs. As long as the price holds within the rising wedge, the technical outlook continues to favor further upside.

Gold Outlook: Bullish Setup Intact as Geopolitical and Fed Risks Support Price
 

Gold remains supported by geopolitical tensions, policy uncertainty, and a confirmed technical breakout. The recent rebound above $5,000 reflects renewed safe-haven demand amid rising Middle East tensions and the Fed’s cautious stance. While the nomination of a hawkish Fed Chair has clouded the policy outlook, technical structure remains favorable. As long as price holds within the rising wedge, the broader bullish outlook stays intact. 

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