Forex
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2 day ago
4 min read
Written by Greenup24
Gold prices (XAU/USD) extended their rally for a seventh consecutive day, rising more than 0.6% in Tuesday trading. This strong advance came as escalating geopolitical tensions, an intensifying trade war, and speculation about potential currency market intervention to support the Japanese yen significantly boosted demand for safe haven assets.
At the time of writing, after rebounding from an intraday low of $4,990, gold is trading around $5,091.
Rising trade tensions especially between the United States and South Korea have unsettled financial markets. Donald Trump’s threat to impose a 25% tariff on goods imported from Seoul added further pressure on the US dollar, a development that supported the precious metals market.
Since the start of the year, gold’s return has reached approximately 17.7%, and the market is now attempting to surpass the exceptionally strong performance of 2025 (nearly a 60% gain).
The risk of a potential US government shutdown on January 30 has returned to the headlines, increasing political uncertainty.
At the same time, rumors of coordinated intervention in the foreign-exchange market to strengthen the Japanese yen have contributed to a weaker US dollar, further enhancing gold’s appeal.
The US Dollar Index (DXY) has fallen by roughly 0.9% to a four-year low, a move that has directly favored gold.
The latest Consumer Confidence report from the Conference Board shows that US consumers’ views on income, business conditions, and the labor market have deteriorated sharply. The index dropped to 84.5 in January, marking its weakest level since 2014. Such data typically reinforce expectations for a more accommodative policy stance, providing support for gold prices.
Traders’ attention is now fixed on the Federal Reserve’s monetary policy decision especially the press conference held by the Fed Chair. While interest rates are expected to remain unchanged, the tone of the Chair’s remarks could play a decisive role in determining gold’s next move.
Based on market pricing, traders are currently factoring in about 45 basis points of rate cuts by year end.
Broad-based US dollar weakness remains the primary driver of gold’s uptrend. Even a modest rise in US 10 year Treasury yields has failed to curb gold’s advance. In this context, some major international banks have forecast that gold could reach $6,000 per ounce by 2026.
Gold’s uptrend remains intact, and a sustained break above $5,000 has paved the way for new record highs.
Resistance levels:
Support levels:
If the Fed Chair’s tone turns more hawkish than expected, a wave of profit taking and a short term pullback could occur. However, as long as gold holds above key support zones, the broader outlook remains bullish.
