Gold Price Rally above $5500 as World Uncertainties Grow

Price action shows strength holding at elevated levels rather than a sharp reversal. Attention has now shifted to whether momentum can persist during this high-volatility phase.

Safe-Haven Demand Drives Gold Price Above $5,500

Gold’s move above $5,500 follows days of persistent buying pressure driven by global uncertainty and concerns about currency debasement. In a recent post on X, market analyst Christophe Barraud noted that the state of thin liquidity in the market contributed to the surge as prices hit record highs.

Source: X

A weaker dollar and the stress persisting in the sovereign bond markets have helped the rally. Capital movement has moved towards hard assets by the investors as insurance against fiscal expansion and geopolitical risk.

Open Interest Expansion Signals Aggressive Positioning

Aditionally, derivatives data indicate that open interest in the metal has been on an increasing trend since the gold breakout. Futures participation rose as the price rose over $5,400 and ranged to $5,500. This is an indication that the market was welcoming new positions instead of short covering, itself being the cause of the shift.

Source: Open Interest

Nevertheless, an increasing open interest in a sharp rise is also an indication of increased leverage. This state, coupled with thin liquidity, usually results in intraday changes.

The existing structure is an open interest at the highs of the cycles, that is, the price will be sensitive to an abrupt change in sentiments. The question of whether open interest will stabilize or unwind is what the market players are keenly observing.

Price Discovery Takes Hold Above Psychological Levels

At press time, gold (XAUUSD) was trading at $5,500.50, posting a daily gain of $103.83, or 1.58%. The session began at the price of $5, 414.84, and soon gained a good buying demand. Price hit an intraday high of $5, 597.04 and then settled a little, whereas the low of the session was at $5,414.84

Source: TradingView

The proximity to the high end of the day-to-day range indicates that the buyers were in control to the end of the session. It is observed that having a price above the $5,500 psychological level is an acceptance at a higher price.

Momentum Indicators Show Strength but Elevated Conditions

Trading volume expanded to around 256.87K ticks, supporting the breakout and confirming broad participation. With no major historical resistance overhead, gold has entered a price discovery phase. In such conditions, momentum tends to guide price behavior more than past supply zones.

Momentum indicators remain firmly bullish but stretched. The RSI (14) stands at 91.21, well above typical overbought thresholds, while its average sits near 77.77. Such readings often appear during strong trends but can precede consolidation phases. The MACD also confirms strength, with the MACD line at $249.30, the signal line at $170.96, and a positive histogram of $78.33.