The gold market has just gone through a truly volatile phase. After the Iranian drone incident and the news that Kevin Warsh is set to become Fed Chair, prices rebounded in a V-shape and successfully broke through $5,000. Anyone who has been holding positions from the early days all the way through to this latest phase should truly be congratulated.

From a technical perspective, the 4H chart shows strong buying pressure, breaking through the Fibonacci 38.2% level at 4,956. The price is currently trading above the 200 EMA. The next targets are 5,100 and 5,191. However, Stoch RSI has already entered the Overbought zone, which could lead to a short-term pullback.

What’s interesting is that the market is speculating that Kevin Warsh could be hawkish. Still, analysts at SocGen and Deutsche Bank believe that last week’s heavy sell-off was only profit-taking, not a fundamental change. Policy uncertainty remains a tailwind for gold.

For long-term investors, if you think gold is a good safe haven for asset custody during tense times like this, you may consider accumulating on short-term dips. The year-end target still stands at 6,000 according to major banks, but in the short term you should be cautious of profit-taking sell pressure around 5,050–5,100.

Recommendation: If you plan to enter a buy, wait for the price to pull back and test the 5,000–4,980 area first. Don’t chase prices after they’ve topped out, because you risk getting stuck at the top. For those holding gold custody on a long-term basis, this is still a good opportunity to accumulate quality assets.