Gold prices surged past $4,400, continuing their upward trend, driven by rapidly escalating geopolitical risks and expectations of interest rate cuts.
2026-01-05 13:31:56
Gold (XAU/USD) received strong buying support at the start of the new week, continuing to rise in Asian trading and climbing above $4,400, indicating a significant increase in safe-haven demand.
The sharp rise in geopolitical risks has become the core factor driving up gold prices. The recent US ground military strikes against Venezuela, including the arrest of the country's president and his spouse, have further fueled this trend.
Meanwhile, US President Trump's tough rhetoric against Colombia and Mexico sparked market concerns about further instability in Latin America, causing funds to flow rapidly into safe-haven assets such as gold.
Meanwhile, uncertainty persists in other parts of the world. Limited progress in negotiations over the Russia-Ukraine conflict, continued tensions in the Middle East, and instability in Iran have collectively amplified risk aversion in the market, providing solid fundamental support for gold.
Monetary policy is also bullish for gold. The market widely expects the Federal Reserve to begin cutting interest rates in March and further reduce rates later in the year. Although official Fed guidance remains cautious, investors' bets on a future policy shift are significantly stronger than previously anticipated.
Furthermore, discussions surrounding future personnel changes at the Federal Reserve have led the market to believe that there is a potential risk of a more accommodative monetary policy, which has further increased the attractiveness of gold, a non-interest-bearing asset.
It is worth noting that the US dollar index strengthened in tandem with safe-haven demand, rising to its highest level in recent weeks, but the dollar's rebound did not put substantial pressure on gold prices.
This phenomenon indicates that the current market trend remains primarily driven by risk aversion, and gold's position in asset allocation continues to strengthen. Going forward, the market will turn its attention to a series of important US economic data releases this week, particularly the non-farm payroll report and inflation data, which will have a crucial impact on the Federal Reserve's policy path.
From a technical perspective, gold's short-term trend remains clearly bullish. The hourly chart shows that gold prices have successfully broken through and stabilized near the 100-period moving average, with the technical pattern shifting from consolidation to upward correction, indicating that the bulls have regained control.
The MACD indicator has turned positive and continues to expand, with the fast and slow lines forming a bullish alignment, reflecting increasing upward momentum. The RSI is running above 60 but has not yet entered the overbought zone, indicating that gold prices still have technical room to continue rising unless extreme sentiment emerges.
As long as gold prices remain above key moving average support, short-term pullbacks are more likely to be seen as buying opportunities, and the overall technical path still points to a slightly bullish trend or even further gains.
Editor's Note:
In summary, the current rise in gold prices is not driven by a single factor, but rather by the convergence of geopolitical risks and expectations of further easing by the Federal Reserve. Given the continued global uncertainty, even a temporary strengthening of the US dollar is unlikely to diminish gold's safe-haven appeal.
In the short term, gold prices are expected to maintain their strong performance at high levels, but caution is warranted regarding the risk of amplified volatility before and after the release of key macroeconomic data. In the medium term, as long as geopolitical tensions and policy uncertainties do not ease significantly, the bullish logic for gold remains intact.
The sharp rise in geopolitical risks has become the core factor driving up gold prices. The recent US ground military strikes against Venezuela, including the arrest of the country's president and his spouse, have further fueled this trend.
Meanwhile, US President Trump's tough rhetoric against Colombia and Mexico sparked market concerns about further instability in Latin America, causing funds to flow rapidly into safe-haven assets such as gold.
Meanwhile, uncertainty persists in other parts of the world. Limited progress in negotiations over the Russia-Ukraine conflict, continued tensions in the Middle East, and instability in Iran have collectively amplified risk aversion in the market, providing solid fundamental support for gold.
Monetary policy is also bullish for gold. The market widely expects the Federal Reserve to begin cutting interest rates in March and further reduce rates later in the year. Although official Fed guidance remains cautious, investors' bets on a future policy shift are significantly stronger than previously anticipated.
Furthermore, discussions surrounding future personnel changes at the Federal Reserve have led the market to believe that there is a potential risk of a more accommodative monetary policy, which has further increased the attractiveness of gold, a non-interest-bearing asset.
It is worth noting that the US dollar index strengthened in tandem with safe-haven demand, rising to its highest level in recent weeks, but the dollar's rebound did not put substantial pressure on gold prices.
This phenomenon indicates that the current market trend remains primarily driven by risk aversion, and gold's position in asset allocation continues to strengthen. Going forward, the market will turn its attention to a series of important US economic data releases this week, particularly the non-farm payroll report and inflation data, which will have a crucial impact on the Federal Reserve's policy path.
From a technical perspective, gold's short-term trend remains clearly bullish. The hourly chart shows that gold prices have successfully broken through and stabilized near the 100-period moving average, with the technical pattern shifting from consolidation to upward correction, indicating that the bulls have regained control.
The MACD indicator has turned positive and continues to expand, with the fast and slow lines forming a bullish alignment, reflecting increasing upward momentum. The RSI is running above 60 but has not yet entered the overbought zone, indicating that gold prices still have technical room to continue rising unless extreme sentiment emerges.
As long as gold prices remain above key moving average support, short-term pullbacks are more likely to be seen as buying opportunities, and the overall technical path still points to a slightly bullish trend or even further gains.
Editor's Note:
In summary, the current rise in gold prices is not driven by a single factor, but rather by the convergence of geopolitical risks and expectations of further easing by the Federal Reserve. Given the continued global uncertainty, even a temporary strengthening of the US dollar is unlikely to diminish gold's safe-haven appeal.
In the short term, gold prices are expected to maintain their strong performance at high levels, but caution is warranted regarding the risk of amplified volatility before and after the release of key macroeconomic data. In the medium term, as long as geopolitical tensions and policy uncertainties do not ease significantly, the bullish logic for gold remains intact.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
