Gold Is Starting to Look Like Value Again
Gold may be starting to offer value after a difficult spell. Its recent weakness has largely reflected a sharp shift in the interest-rate outlook, as surging energy costs revived inflation fears, encouraged expectations of tighter US monetary policy and pushed real bond yields higher. That is normally a hostile combination for an asset that pays no income. Yet the market may now be discounting too much bad news. Previous tightening cycles show that gold can recover once the pressure from rising real yields begins to ease, while a cooling of Middle East tensions could reduce the need for further rate increases. Longer-term support also remains intact through central-bank buying, concerns over government finances and demand for diversification away from traditional currencies.
The chart is beginning to support that more constructive view. Gold has moved back above its short-term moving averages and is testing the upper boundary of its recent trading range near $4,200. Momentum is improving, with the RSI above 50 but still well below overbought territory, suggesting there may be room for the recovery to continue. A decisive close above $4,200 would provide stronger confirmation and could open the way towards $4,300, with a longer-term objective near $4,450. Until then, the breakout remains unconfirmed, and a rejection could send the price back towards $4,100, $4,000 or the major support area around $3,950.
The opportunity, therefore, is not without risk, but the balance is becoming more appealing. Gold is still close enough to support to offer a reasonable entry point, while a successful breakout would materially improve the upside case. For investors prepared to tolerate some short-term volatility, the recent downturn may represent an opportunity to begin building exposure to gold or high-quality mining shares rather than waiting for the recovery to become obvious.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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