Market Brief: Gold Performance and Outlook Gold prices are demonstrating a cautious recovery this Wednesday, February 18, 2026, following a period of intense volatility. After a significant retreat earlier in the week, bullion is stabilizing as traders reassess the geopolitical landscape and domestic economic indicators. Spot gold is currently trading around **$4,880 per ounce**, attempting to find a firm floor after dropping more than **2%** in the previous session. In domestic markets, 24K gold is hovering near **₹15,435 per gram**, reflecting a correction of approximately **1.4%** from yesterday’s levels. Geopolitical De-escalation The primary driver behind the recent price dip has been a perceived cooling of tensions in the Middle East. Progress in second-round negotiations between the U.S. and Iran in Geneva has significantly eroded the safe-haven premium that supported gold’s record-breaking rally earlier this year. Reports of potential document exchanges between the two nations have led investors to scale back risk hedges. Interest Rate Trajectory Market participants are closely monitoring the Federal Reserve's next moves. While January inflation data slowed to **2.4%**, coming in below the forecast of **2.5%**, Fed officials have signaled a cautious approach. Current sentiment suggests the central bank may hold rates steady for some time to ensure inflation remains on a path toward the **2%** target. Higher-for-longer interest rates typically pressure non-yielding assets like gold. However, many analysts still anticipate at least two rate cuts of **25 basis points** later in 2026, which provides a long-term support pillar for the metal. Holiday Liquidity and Demand Trading volumes remain subdued as major Asian markets, particularly China, are closed for the Lunar New Year. This seasonal absence of the world's largest gold consumers has led to thinner liquidity, which can often exaggerate price swings. Despite the lull in active trading, physical demand in the lead-up to the holiday was exceptionally high. In China, gold jewelry prices surged over **70%** year-over-year to approximately **¥1,529 per gram**, highlighting the deep cultural value and inelastic demand for the metal even at elevated price points. Technical Support and Currency Impact The U.S. Dollar Index has shown resilience, exerting downward pressure on dollar-denominated bullion. Technically, gold is testing key support levels. If it fails to hold the **$4,850** mark, further profit-taking could be triggered. Conversely, maintaining stability near the psychological **$5,000** level remains the goal for bullish investors looking toward the second half of the year.