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Gold tests $4,600, then retreats despite geopolitical, Fed woes

Gold briefly pushed to a new all-time high near $4,600 during Asian trading on Monday before pulling back as traders locked in profits. Despite the retracement, the downside appears limited, as renewed geopolitical concerns continue to support the safe-haven metal.

Market sentiment remains cautious amid reports that US President Donald Trump is considering a range of potential military responses involving Iran, raising fears of a broader escalation in regional tensions. These developments, along with ongoing uncertainty around US monetary policy, are likely to keep Gold well supported even as short-term profit-taking weighs on prices.

The Technical Landscape

Gold made a fresh attempt to establish itself above the $4,350 mark but failed to sustain momentum, leading to a pullback. If prices slip and hold below the $4,300 level, the metal could decline further toward the $4,250 support zone.

"The market is pricing in a dovish pivot faster than anticipated. If the Fed pauses, gold doesn't just walk-it runs.

— CHIEF MARKET STRATEGIST

However, traders should remain cautious of short-term pullbacks. The RSI on the daily timeframe is approaching overbought territory (70+), which historically precedes a consolidation phase.

XAU/USD Technical Overview

XAU/USD continues to trade above its rising 200-period Exponential Moving Average (EMA), now located around $4,322.58, which keeps the broader outlook constructive. The upward slope of this average suggests that pullbacks are likely to find support. Meanwhile, the MACD remains below both its Signal line and the zero level, but it is curling higher, with the negative histogram shrinking—an early sign that bearish momentum is losing steam.

The Relative Strength Index (RSI) stands at 56, holding above the neutral 50 mark and pointing to improving momentum without flashing overbought signals. Should this recovery in momentum persist, buyers may look to push prices higher, while any dips are likely to be absorbed by the prevailing uptrend. A sustained hold above $4,322.58 would keep the bullish bias intact, whereas a clear break below that level could trigger a deeper corrective move.

Fundamental Overview

Growing confidence that the US Federal Reserve will cut interest rates twice more this year, combined with ongoing geopolitical risks, continues to underpin Gold prices. However, the US Dollar is bucking dovish Fed expectations, extending its two-week rally to reach a near one-month high. The firmer Greenback is limiting upside momentum in XAU/USD, urging traders to remain cautious before betting on a strong intraday rebound.

Gold traders await US NFP for Fed rate-cut signals

The US Dollar climbed to its strongest level since December 10 during Friday’s Asian session, pressuring Gold as markets reposition ahead of the crucial US Nonfarm Payrolls (NFP) report.

US Treasury Secretary Scott Bessent said in a CNBC interview that lower interest rates are the missing catalyst for stronger economic growth, arguing that the Fed should not hesitate to ease policy. Markets are currently pricing in a potential rate cut as early as March, followed by another reduction later this year—an outlook that could continue to support the non-yielding yellow metal.

Still, traders remain reluctant to take fresh directional positions until clearer guidance emerges on the Fed’s easing path. As a result, attention is firmly focused on today’s US labor market data. The economy is forecast to have added around 60,000 jobs in December, slightly below November’s 64,000 increase, while the Unemployment Rate is expected to ease to 4.5% from 4.6%.

At the same time, escalating geopolitical tensions are providing a safety net for Gold. Concerns include the US military incursion in Venezuela, rising friction between China and Japan, and the prolonged Russia-Ukraine conflict.

In an interview with The New York Times, US President Donald Trump said he expects the US to maintain long-term control over Venezuela and benefit from its vast oil reserves. Separately, China intensified its dispute with Japan by restricting exports of rare earths and related magnets following Taiwan-related remarks by Japan’s Prime Minister.

Adding to the geopolitical uncertainty, German Chancellor Friedrich Merz warned that an end to the Ukraine war remains distant, describing proposals to deploy European troops as risky given Russia’s stance.

Key Points

Gold retreated after failing to hold above the $4,350 mark.

Silver advanced as buyers stepped in to take advantage of the recent dip.

Platinum pushed toward fresh highs as its upward trend remained intact.

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Get Signals Access
Level
Classic Fibonacci
R3
4590.94
4585.89
R2
4585.89
4581.66
R1
4579.86
4579.04
Pivot Point
4574.81
4574.81
S1
4568.78
4570.58
S2
4563.73
4567.96
S3
4557.70
4563.73
Level
.
R3
.
R2
.
R1
.
Pivot Point
.
S1
.
S2
.
S3
.
Classic
Fibonacci
4590.94
4585.89
4585.89
4581.66
4579.86
4579.04
4574.81
4574.81
4568.78
4570.58
4563.73
4567.96
4557.70
4563.73

Executive Summary

Gold briefly hit a record high near $4,600 before pulling back on profit-taking, but the broader bullish structure remains intact.

Geopolitical risks (Iran tensions, China–Japan dispute, Russia–Ukraine war) and Fed rate-cut expectations continue to support prices.

Technically, XAU/USD holds above the rising 200 EMA near $4,322, preserving a bullish bias.

Momentum indicators (RSI & MACD) suggest fading bearish pressure and potential upside continuation.

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James Sterling

Senior Market Analyst at Forexpediaa

James is a Chartered Market Technician (CMT) with over 15 years of experience trading G10 currencies and commodities. Formerly at Goldman Sachs, he now leads the technical analysis division at Forexpediaa.

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Discussion

ORGANIZATIONS THAT INFLUENCE XAU/USD

 â€˘ WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.

• LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.

• COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.

• CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.

• Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People’s Bank of China (PBoC) significantly influence Gold prices through their monetary policies.