Gold prices continued their upward trend, driven by rising expectations of interest rate cuts and safe-haven demand.
2026-01-14 10:11:46
Gold prices (XAU/USD) rose to around $4,600 in early Asian trading on Wednesday, continuing their strong performance. Following the release of the latest US inflation data, market bets on further interest rate cuts by the Federal Reserve this year have clearly intensified, becoming one of the main drivers pushing gold prices higher.
The latest U.S. Consumer Price Index (CPI) report shows that core CPI growth was lower than market expectations. This result is seen as a signal of cooling inflation, boosting market confidence in further easing policies from the Federal Reserve.
With rising expectations of interest rate cuts, the opportunity cost of holding gold decreases, which benefits the price of precious metals that do not offer interest income. At the same time, safe-haven demand also supports gold prices.
Discussions surrounding the independence of US monetary policy have intensified again, while uncertainty surrounding the situation in the Middle East has exacerbated market caution. Recent large-scale protests in the region, heightened security tensions, and limited access to information have put pressure on risk appetite in global financial markets.
Against this backdrop, gold, as a traditional safe-haven asset, has attracted some capital inflows. Looking ahead, market focus will shift to the upcoming release of US retail sales and producer price index (PPI) data. These two figures are considered important windows into the resilience of the US economy and inflation trends.
If data shows renewed inflationary pressures, it could push the dollar stronger and put downward pressure on dollar-denominated gold prices in the short term; conversely, it could further solidify market expectations for interest rate cuts, providing continued upward momentum for gold prices.
From a daily chart perspective, gold remains in a strong upward trend. The price continues to trade above the major moving average system, with the 5-day, 10-day, and 20-day moving averages forming a bullish alignment, indicating a continued bullish medium-term trend.
In terms of momentum indicators, the daily RSI remains in the high range, approaching but not yet clearly entering the extreme overbought zone, indicating that bullish momentum is still present, but short-term volatility risk is rising. If the RSI further approaches or rises above 70, gold prices may face technical consolidation pressure.
At key price levels, the area around $4,600 has become an important psychological barrier in the short term. If it holds above this level, it may test the previous high area further. On the downside, support is seen in the $4,520-$4,500 range, which is also close to a dense cluster of short-term moving averages. If this area is breached, gold prices may enter a period of high-level consolidation or a technical correction.
Overall, the daily chart structure shows that the gold trend remains strong, but in the high-level area, it is more likely to consolidate gains rather than experience a rapid, one-sided rise.
Editor's Note:
The current strength in gold prices is supported by both monetary policy logic and safe-haven demand. Falling inflation has reinforced market expectations of a continued interest rate cut cycle, a significant bullish factor for gold prices in the medium term.
However, it's important to note that gold prices are near historical highs, and technical indicators suggest that the risk of chasing the rally in the short term is accumulating. If subsequent US economic data becomes stronger again, gold price volatility could increase significantly. Overall, the medium-term trend for gold remains bullish, but in the short term, the risk of a pullback due to high-level consolidation should be closely monitored.
The latest U.S. Consumer Price Index (CPI) report shows that core CPI growth was lower than market expectations. This result is seen as a signal of cooling inflation, boosting market confidence in further easing policies from the Federal Reserve.
With rising expectations of interest rate cuts, the opportunity cost of holding gold decreases, which benefits the price of precious metals that do not offer interest income. At the same time, safe-haven demand also supports gold prices.
Discussions surrounding the independence of US monetary policy have intensified again, while uncertainty surrounding the situation in the Middle East has exacerbated market caution. Recent large-scale protests in the region, heightened security tensions, and limited access to information have put pressure on risk appetite in global financial markets.
Against this backdrop, gold, as a traditional safe-haven asset, has attracted some capital inflows. Looking ahead, market focus will shift to the upcoming release of US retail sales and producer price index (PPI) data. These two figures are considered important windows into the resilience of the US economy and inflation trends.
If data shows renewed inflationary pressures, it could push the dollar stronger and put downward pressure on dollar-denominated gold prices in the short term; conversely, it could further solidify market expectations for interest rate cuts, providing continued upward momentum for gold prices.
From a daily chart perspective, gold remains in a strong upward trend. The price continues to trade above the major moving average system, with the 5-day, 10-day, and 20-day moving averages forming a bullish alignment, indicating a continued bullish medium-term trend.
In terms of momentum indicators, the daily RSI remains in the high range, approaching but not yet clearly entering the extreme overbought zone, indicating that bullish momentum is still present, but short-term volatility risk is rising. If the RSI further approaches or rises above 70, gold prices may face technical consolidation pressure.
At key price levels, the area around $4,600 has become an important psychological barrier in the short term. If it holds above this level, it may test the previous high area further. On the downside, support is seen in the $4,520-$4,500 range, which is also close to a dense cluster of short-term moving averages. If this area is breached, gold prices may enter a period of high-level consolidation or a technical correction.
Overall, the daily chart structure shows that the gold trend remains strong, but in the high-level area, it is more likely to consolidate gains rather than experience a rapid, one-sided rise.
Editor's Note:
The current strength in gold prices is supported by both monetary policy logic and safe-haven demand. Falling inflation has reinforced market expectations of a continued interest rate cut cycle, a significant bullish factor for gold prices in the medium term.
However, it's important to note that gold prices are near historical highs, and technical indicators suggest that the risk of chasing the rally in the short term is accumulating. If subsequent US economic data becomes stronger again, gold price volatility could increase significantly. Overall, the medium-term trend for gold remains bullish, but in the short term, the risk of a pullback due to high-level consolidation should be closely monitored.
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