GOLD resumes record-setting run amid geopolitical and Fed concerns
Gold hits $4,600 for the first time on record early Monday, then retreats on profit-taking.
The US Dollar wilts on Trump’s fresh attacks on the Fed’s independence, rate cut bets.
Gold confirms a bullish breakout on Friday above $4,490; record-setting rally set to extend.
Gold is holding its profit-taking pullback from fresh record highs just above $4,600 on Monday, starting the week with a bang, courtesy of escalating geopolitical tensions and intensifying concerns over the US Federal Reserve’s independence, which both induce a full-fledged risk-off environment.
Investors flock to safety in the traditional store of value, Gold, digesting the weekend’s reports that US President Donald Trump is weighing a series of potential military options in Iran, following days of civil unrest and should the Iranian regime use lethal force against civilians.
Further, ongoing tensions between Russia and Ukraine also add to the risk-off market mood. The United Nations Security Council called for an emergency meeting on Monday after Russia used its new Oreshnik hypersonic ballistic missile on Friday in a major strike on Ukraine.
Moreover, markets also remain wary over the Fed’s independence after US federal prosecutors opened a criminal investigation into Chair Jerome Powell regarding the central bank’s renovation of its Washington headquarters.
These factors, combined with increased odds of interest rate cuts by the Fed this year, continue to undermine the USD, while boosting the sentiment around the non-yielding Gold.
Data on Friday showed that Nonfarm Payrolls increased by 50,000 jobs last month after a downwardly revised rise of 56,000 in November and against the expected gain of 60,000 jobs. The Unemployment Rate dipped to 4.4% in December, compared to the estimated 4.5% reading.
Attention now turns to the US CPI data for December, which will inject fresh volatility in the market. The data will be critical to gauging the chance of a March Fed rate cut, the odds of which currently sit at about 30%, according to the CME Group’s FedWatch tool.
In the meantime, geopolitical developments and worries over the Fed’s autonomy will continue to drive Gold price action.
Daily technical analysis
In the daily chart, XAU/USD trades at $4,575.47. The 21- and 50-day SMAs advance and remain below price, underscoring firm bullish momentum. Shorter SMAs sit above the 100- and 200-day ones, with all slopes rising and buyers in control. The 21-day SMA at $4,403.01 offers nearby dynamic support. The Relative Strength Index (14) prints 69 (near overbought), in line with strong momentum; a pause could emerge if it pushes above 70. A dip would target the 50-day SMA at $4,243.70.
Longer-term SMAs reinforce the uptrend as the 100-day rises to $4,032.27 and the 200-day to $3,674.30, both well beneath price. The bullish alignment of shorter above longer averages supports an extension while pullbacks hold above the 21-day and 50-day SMAs. RSI at 69 stays just below overbought, keeping momentum strong but leaving room for brief consolidation if it cools toward 60. Initial support is layered at $4,403.01–$4,243.70, while the broader bullish bias would persist above the rising 100-day SMA.
GOLD resumes record-setting run amid geopolitical and Fed concerns
Gold is holding its profit-taking pullback from fresh record highs just above $4,600 on Monday, starting the week with a bang, courtesy of escalating geopolitical tensions and intensifying concerns over the US Federal Reserve’s independence, which both induce a full-fledged risk-off environment.
Investors flock to safety in the traditional store of value, Gold, digesting the weekend’s reports that US President Donald Trump is weighing a series of potential military options in Iran, following days of civil unrest and should the Iranian regime use lethal force against civilians.
Further, ongoing tensions between Russia and Ukraine also add to the risk-off market mood. The United Nations Security Council called for an emergency meeting on Monday after Russia used its new Oreshnik hypersonic ballistic missile on Friday in a major strike on Ukraine.
Moreover, markets also remain wary over the Fed’s independence after US federal prosecutors opened a criminal investigation into Chair Jerome Powell regarding the central bank’s renovation of its Washington headquarters.
These factors, combined with increased odds of interest rate cuts by the Fed this year, continue to undermine the USD, while boosting the sentiment around the non-yielding Gold.
Data on Friday showed that Nonfarm Payrolls increased by 50,000 jobs last month after a downwardly revised rise of 56,000 in November and against the expected gain of 60,000 jobs. The Unemployment Rate dipped to 4.4% in December, compared to the estimated 4.5% reading.
Attention now turns to the US CPI data for December, which will inject fresh volatility in the market. The data will be critical to gauging the chance of a March Fed rate cut, the odds of which currently sit at about 30%, according to the CME Group’s FedWatch tool.
In the meantime, geopolitical developments and worries over the Fed’s autonomy will continue to drive Gold price action.
Daily technical analysis
In the daily chart, XAU/USD trades at $4,575.47. The 21- and 50-day SMAs advance and remain below price, underscoring firm bullish momentum. Shorter SMAs sit above the 100- and 200-day ones, with all slopes rising and buyers in control. The 21-day SMA at $4,403.01 offers nearby dynamic support. The Relative Strength Index (14) prints 69 (near overbought), in line with strong momentum; a pause could emerge if it pushes above 70. A dip would target the 50-day SMA at $4,243.70.
Longer-term SMAs reinforce the uptrend as the 100-day rises to $4,032.27 and the 200-day to $3,674.30, both well beneath price. The bullish alignment of shorter above longer averages supports an extension while pullbacks hold above the 21-day and 50-day SMAs. RSI at 69 stays just below overbought, keeping momentum strong but leaving room for brief consolidation if it cools toward 60. Initial support is layered at $4,403.01–$4,243.70, while the broader bullish bias would persist above the rising 100-day SMA.
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