Gold (XAU/USD) continues to hold intraday gains, trading just below all-time highs, as investors increasingly seek safe-haven assets amid heightened geopolitical tensions and ongoing USD weakness. This article from Zeyphurs offers readers a clear and thorough explanation of the subject.
The recent rally is fueled by fresh trade-war fears, rising global risk aversion, and uncertainty over the Federal Reserve’s 2026 rate outlook, all of which are reinforcing strong bullish sentiment in the yellow metal and keeping momentum firmly on the upside.
Key Drivers: Tariff Threats and Safe-Haven Demand
Gold’s positive traction has been fueled by renewed safe-haven flows, following the US President’s announcement of new tariffs on eight European countries over their opposition to his Greenland acquisition plan. He indicated a 10% tariff starting February 1, potentially rising to 25% by June if no agreement is reached.
The announcement triggered strong condemnation from major EU nations, with France warning of possible economic countermeasures. Market participants interpreted this as a signal of renewed transatlantic trade tensions, which, in turn, intensified global risk aversion. Investors responded by rotating into traditional safe-haven assets such as Gold, underpinning the metal near record highs.
Geopolitical Risks Amplify Bullish Momentum
Beyond trade concerns, ongoing geopolitical risks continue to provide strong support for Gold. Rising tensions in the Middle East and the prolonged Russia-Ukraine conflict are reinforcing demand for non-yielding assets, further underpinning the yellow metal’s safe-haven appeal.
Iran’s warning that any attack on Supreme Leader Ayatollah Ali Khamenei could trigger an “all-out war” heightened uncertainty. Simultaneously, reports from Ukraine’s government suggested Russia may target nuclear-related sites, while strikes continued to demonstrate a lack of diplomatic progress. These developments increase safe-haven demand, pushing XAU/USD higher despite elevated valuations.
USD Weakness Adds Support to Gold
The US Dollar (USD) has also faced headwinds as trade war fears and reduced expectations for Federal Reserve rate cuts have weakened the currency. The USD, which had reached its highest level since December 9, has retreated sharply in response to the evolving fundamental landscape.
While reduced bets on two additional Fed rate cuts in 2026 may temper the intensity of USD selling, the Dollar’s retreat from its peak has provided further support for Gold, amplifying the metal’s upward trajectory and reinforcing bullish momentum in the near term.
Technical Analysis: Ascending Trend Channel and Momentum Indicators
From a technical perspective, Gold has been steadily climbing within a well-defined ascending trend channel since late October, indicating that a short-term uptrend is firmly in place. The MACD indicator remains above the zero line, signaling strengthening bullish momentum and suggesting continued upward pressure.
Meanwhile, the Relative Strength Index (RSI) stands at 69.96, approaching the overbought threshold, which could temporarily cap further gains or lead to short-term consolidation before the next move higher.
The upper channel resistance near current levels represents a key hurdle. A sustained breakout above resistance would likely extend the rally, whereas a rejection could see Gold retest support at approximately $4,406.94, where the ascending channel is expected to attract buying interest.
Market Outlook: Focus on US Data and Fed Policy
Traders are eyeing upcoming US economic releases for fresh directional cues. The Personal Consumption Expenditure (PCE) Price Index and the final US Q3 GDP print, due on Thursday, could influence risk sentiment and interest rate expectations, thereby impacting Gold’s trajectory.
Nevertheless, the fundamental backdrop currently favors XAU/USD bulls, supported by heightened safe-haven demand amid trade tensions and geopolitical uncertainty, weaker USD dynamics providing a tailwind for non-yielding assets, and short-term technical momentum reinforced by the ascending trend channel and other bullish indicators.
Even with reduced expectations for further Fed easing, Gold’s upside potential remains intact, suggesting that a continuation of the recent upward trajectory is likely unless risk sentiment normalizes or USD strength reemerges.
Conclusion
Gold’s resilience near record highs reflects a complex interplay of geopolitical risk, USD movements, and monetary policy expectations. Fresh tariff threats from the US and rising tensions in global hotspots have prompted investors to favor traditional safe-haven assets, supporting the yellow metal.
From a technical standpoint, Gold’s ascending trend channel, along with MACD and RSI signals, points to further potential gains, though a breakout or pullback at key resistance levels will determine the next leg of the rally.
Traders should remain attentive to evolving trade-war developments, geopolitical flashpoints, US economic data that could influence Fed policy expectations, and technical resistance levels near the current peak, as these factors may significantly impact XAU/USD price action.
In this context, Gold appears poised to extend its bullish trajectory, supported by a combination of robust safe-haven demand, ongoing USD weakness, and strong technical momentum, suggesting that the yellow metal may continue to attract investor interest in the near term.
