Gold Outlook: Precious metal to hit its first all-time high of 2026
2026-01-13 01:26:53
Gold and silver quickly hit their first all-time highs at the start of 2026. Gold broke through $4,600 per ounce for the first time, while silver approached the $85 mark. The most crucial question now is: will this year continue to break new highs like last year, or is this rally just a flash in the pan? However, for now, the path of least resistance for gold and silver remains upward. As long as prices continue their "higher highs, higher lows" sequence, trying to guess the top is largely pointless. That said, our 2026 gold outlook is not super bullish, but this should not be misinterpreted as a recommendation to short. In fact, going against the trend in a strong uptrend is rarely profitable.
The Federal Reserve's independence is being questioned, and gold is shining.
The main catalyst driving today's rally was an unexpected piece of news: federal prosecutors have launched a criminal investigation into Federal Reserve Chairman Jerome Powell. This development immediately sparked concerns about the Fed's independence, prompting investors to sell off U.S. assets and turn to traditional safe-haven assets. As the market digested the potential impact of this event, both gold and silver surged to record levels.
Powell stated that the investigation stemmed from the Federal Reserve's reluctance to align interest rate policy with the White House's preferences. Gold briefly broke through $4,600 before retreating slightly. The latest rise in precious metals, along with the sharp decline in the dollar, occurred after Friday's mixed U.S. jobs report—which initially helped extend the dollar's gains.
If concerns about the Federal Reserve's independence subside quickly, gold may face some short-term pressure as the dollar stabilizes. However, a basic expectation is that Powell will complete his term, and monetary policy will continue to be driven by economic data rather than political influence. If this is the case, market attention should quickly return to macroeconomic data, with this week's Consumer Price Index (CPI) and retail sales figures being the focus.
Gold Outlook: US Dollar in Focus Ahead of CPI Release
Following last Friday's mixed and generally weak US jobs data, the market expects tomorrow's inflation report to show overall CPI remaining unchanged at 2.7% year-on-year, while both overall and core CPI are expected to rise by 0.3% month-on-month. Even a slightly higher-than-expected core reading could be enough to reignite the dollar's rally.
Meanwhile, the market is also watching for a potential unfavorable Supreme Court ruling on Trump's tariffs, which could be released sometime this week and could further support the dollar. However, these factors appear secondary at this point. Investors may need greater certainty regarding the Federal Reserve situation before rebuilding substantial long dollar positions. A significantly weaker-than-expected inflation data, coupled with lingering doubts about the Fed's independence, could trigger a deeper and more disorderly sell-off in the dollar.
Geopolitical risks continue to support gold prices.
Aside from currency and political concerns, gold remains supported by ongoing geopolitical risks. While tensions have eased somewhat in recent weeks, the latest escalation of conflict related to Iran has brought renewed uncertainty. A key risk lies in the potential re-involvement of the United States in regional affairs.
Furthermore, developments in Venezuela and renewed focus on Greenland serve as a reminder that geopolitical shocks can occur swiftly and without warning. In this context, safe-haven demand is likely to persist until the situation in Iran de-escalates and greater certainty emerges in these broader geopolitical hotspots, thus maintaining a positive short-term outlook for gold.
Gold Technical Analysis and Key Levels to Watch
(Spot gold daily chart source: FX678)
From a technical perspective, the trend for gold remains very positive. The market continues to exhibit a clear "higher highs, higher lows" pattern, making it difficult for aggressive bearish views to hold water. As long as this structure remains intact, there is little point in firmly shorting gold for trend followers, although mean-reversion traders may disagree. For most participants, a clear and decisive bearish signal is needed for shorting to become attractive. Although momentum indicators suggest the market is overbought, this in itself is not sufficient reason to sell.
On the downside, the first support zone for spot gold is between $4,500 and $4,550. This area represents the previous all-time high from last December and carries significant psychological weight. A break below this zone would target the October high of around $4,380, followed by the uptrend line support near $4,350. The $4,350-$4,380 area was a stubborn resistance level before gold's eventual breakout in December. Although prices briefly dipped below this zone, they quickly recovered at the beginning of the year and subsequently pushed to new all-time highs. To me, this area is a key dividing line. A decisive break below this zone would alter the risk balance of the gold outlook and open the door to a deeper corrective phase.
The lack of clear resistance levels on the upside naturally brings the next round number targets of $4,600 and $4,700 into view. Also worth noting are the Fibonacci extension levels of $4,625, $4,687, and $4,720, areas that may attract Fibonacci traders to take profits.
The Federal Reserve's independence is being questioned, and gold is shining.
The main catalyst driving today's rally was an unexpected piece of news: federal prosecutors have launched a criminal investigation into Federal Reserve Chairman Jerome Powell. This development immediately sparked concerns about the Fed's independence, prompting investors to sell off U.S. assets and turn to traditional safe-haven assets. As the market digested the potential impact of this event, both gold and silver surged to record levels.
Powell stated that the investigation stemmed from the Federal Reserve's reluctance to align interest rate policy with the White House's preferences. Gold briefly broke through $4,600 before retreating slightly. The latest rise in precious metals, along with the sharp decline in the dollar, occurred after Friday's mixed U.S. jobs report—which initially helped extend the dollar's gains.
If concerns about the Federal Reserve's independence subside quickly, gold may face some short-term pressure as the dollar stabilizes. However, a basic expectation is that Powell will complete his term, and monetary policy will continue to be driven by economic data rather than political influence. If this is the case, market attention should quickly return to macroeconomic data, with this week's Consumer Price Index (CPI) and retail sales figures being the focus.
Gold Outlook: US Dollar in Focus Ahead of CPI Release
Following last Friday's mixed and generally weak US jobs data, the market expects tomorrow's inflation report to show overall CPI remaining unchanged at 2.7% year-on-year, while both overall and core CPI are expected to rise by 0.3% month-on-month. Even a slightly higher-than-expected core reading could be enough to reignite the dollar's rally.
Meanwhile, the market is also watching for a potential unfavorable Supreme Court ruling on Trump's tariffs, which could be released sometime this week and could further support the dollar. However, these factors appear secondary at this point. Investors may need greater certainty regarding the Federal Reserve situation before rebuilding substantial long dollar positions. A significantly weaker-than-expected inflation data, coupled with lingering doubts about the Fed's independence, could trigger a deeper and more disorderly sell-off in the dollar.
Geopolitical risks continue to support gold prices.
Aside from currency and political concerns, gold remains supported by ongoing geopolitical risks. While tensions have eased somewhat in recent weeks, the latest escalation of conflict related to Iran has brought renewed uncertainty. A key risk lies in the potential re-involvement of the United States in regional affairs.
Furthermore, developments in Venezuela and renewed focus on Greenland serve as a reminder that geopolitical shocks can occur swiftly and without warning. In this context, safe-haven demand is likely to persist until the situation in Iran de-escalates and greater certainty emerges in these broader geopolitical hotspots, thus maintaining a positive short-term outlook for gold.
Gold Technical Analysis and Key Levels to Watch
(Spot gold daily chart source: FX678)
From a technical perspective, the trend for gold remains very positive. The market continues to exhibit a clear "higher highs, higher lows" pattern, making it difficult for aggressive bearish views to hold water. As long as this structure remains intact, there is little point in firmly shorting gold for trend followers, although mean-reversion traders may disagree. For most participants, a clear and decisive bearish signal is needed for shorting to become attractive. Although momentum indicators suggest the market is overbought, this in itself is not sufficient reason to sell.
On the downside, the first support zone for spot gold is between $4,500 and $4,550. This area represents the previous all-time high from last December and carries significant psychological weight. A break below this zone would target the October high of around $4,380, followed by the uptrend line support near $4,350. The $4,350-$4,380 area was a stubborn resistance level before gold's eventual breakout in December. Although prices briefly dipped below this zone, they quickly recovered at the beginning of the year and subsequently pushed to new all-time highs. To me, this area is a key dividing line. A decisive break below this zone would alter the risk balance of the gold outlook and open the door to a deeper corrective phase.
The lack of clear resistance levels on the upside naturally brings the next round number targets of $4,600 and $4,700 into view. Also worth noting are the Fibonacci extension levels of $4,625, $4,687, and $4,720, areas that may attract Fibonacci traders to take profits.
- Risk Warning and Disclaimer
- 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.
