Gold prices surged to new highs as a triple bomb of interest rate cut expectations, geopolitical risks, and other factors exploded.
2026-01-14 15:19:12
On Wednesday (January 14), spot gold rebounded to around $4,635 per ounce during the Asian and European sessions, a daily increase of about 1%, briefly touching a record high of $4,639.49. As US inflation data softens and market expectations for a Federal Reserve rate cut rise, gold and other precious metals are attracting buyers.
December's US inflation data showed a slowdown in core inflation, reinforcing market views that price pressures are gradually easing. Interest rate futures indicate that investors are divided on whether the Federal Reserve will cut rates two or three times this year, but both expectations are significantly higher than the median forecast of a single rate cut by policymakers.
The launch of a criminal investigation by U.S. prosecutors into Federal Reserve Chairman Jerome Powell has sparked renewed concerns about the Fed's independence, leading to increased demand for safe-haven assets and providing support for gold prices.
Meanwhile, geopolitical risks remain high, and markets are closely watching the possibility of US intervention in Iran's political turmoil after issuing multiple warnings of potential military action.
The U.S. core consumer price index (CPI) (excluding food and energy) rose 0.2% month-over-month in December, below market expectations; the annualized core inflation rate remained at 2.6%, unchanged from a four-year low. This data, after earlier figures were distorted by the effects of shutdowns, provides a clearer signal of slowing inflation. Meanwhile, the December 2025 CPI is projected to rise 0.3% month-over-month, in line with market expectations and unchanged from September's increase, with the annualized inflation rate remaining at 2.7% as expected.
President Trump said Monday he would impose a 25% tariff on any country trading with Iran, further pressuring Tehran amid growing domestic protests. He added that the measure would take effect immediately but provided no further details. Trump warned on Sunday that action could be taken before the meeting, although he revealed that the Iranian leadership had proactively sought “negotiations” following his military threats.
U.S. federal prosecutors have threatened to indict Federal Reserve Chairman Jerome Powell over his statements to Congress regarding a building renovation project, raising questions about the Fed's independence. The Trump administration continues to pressure the Fed to cut interest rates, while Powell has called the threat a "pretext" to influence policy.
U.S. nonfarm payrolls increased by 50,000 in December, down from 56,000 in November (revised from 64,000) and below market expectations of 60,000. However, the unemployment rate dipped slightly to 4.4% in December from 4.6% in November, while the annualized rate of increase in average hourly earnings rose to 3.8% from 3.6%.
Richmond Fed President Barkin said the declining unemployment rate is a positive sign, and job growth, while moderate, is stable. He added that it's difficult to find companies hiring outside of the healthcare or artificial intelligence sectors, and it's unclear whether the labor market will trend towards increased hiring or layoffs.
Daily chart technical analysis shows that gold prices are still within an emerging rising wedge pattern, indicating weakening upward momentum and warning that a break below the lower trendline of the wedge with significant trading volume could trigger a bearish reversal.
The 9-day exponential moving average (EMA, 4523.90) is above the 50-day EMA (4286.08), confirming a clear bullish bias. Gold prices are currently holding steady above the fast moving averages, and the 50-day EMA's slope continues to rise, highlighting medium-term upward pressure.
The Relative Strength Index (RSI) was in overbought territory on the 14th, indicating that although the trend remains unchanged, the momentum has been overstretched.
On the upside, the immediate resistance level is seen at $4,640, which coincides with the upper trendline of the rising wedge. A break above this multiple resistance level could see gold prices further rise towards the $4,660 level.
On the downside, initial support is at the 9-day EMA (4523.90), followed by the lower boundary of the rising wedge (around $4470).
(Spot gold daily chart, source: FX678)
At 15:18 Beijing time, spot gold was trading at $4634.86 per ounce.
December's US inflation data showed a slowdown in core inflation, reinforcing market views that price pressures are gradually easing. Interest rate futures indicate that investors are divided on whether the Federal Reserve will cut rates two or three times this year, but both expectations are significantly higher than the median forecast of a single rate cut by policymakers.
The launch of a criminal investigation by U.S. prosecutors into Federal Reserve Chairman Jerome Powell has sparked renewed concerns about the Fed's independence, leading to increased demand for safe-haven assets and providing support for gold prices.
Meanwhile, geopolitical risks remain high, and markets are closely watching the possibility of US intervention in Iran's political turmoil after issuing multiple warnings of potential military action.
Gold prices remain strong
The U.S. core consumer price index (CPI) (excluding food and energy) rose 0.2% month-over-month in December, below market expectations; the annualized core inflation rate remained at 2.6%, unchanged from a four-year low. This data, after earlier figures were distorted by the effects of shutdowns, provides a clearer signal of slowing inflation. Meanwhile, the December 2025 CPI is projected to rise 0.3% month-over-month, in line with market expectations and unchanged from September's increase, with the annualized inflation rate remaining at 2.7% as expected.
President Trump said Monday he would impose a 25% tariff on any country trading with Iran, further pressuring Tehran amid growing domestic protests. He added that the measure would take effect immediately but provided no further details. Trump warned on Sunday that action could be taken before the meeting, although he revealed that the Iranian leadership had proactively sought “negotiations” following his military threats.
U.S. federal prosecutors have threatened to indict Federal Reserve Chairman Jerome Powell over his statements to Congress regarding a building renovation project, raising questions about the Fed's independence. The Trump administration continues to pressure the Fed to cut interest rates, while Powell has called the threat a "pretext" to influence policy.
U.S. nonfarm payrolls increased by 50,000 in December, down from 56,000 in November (revised from 64,000) and below market expectations of 60,000. However, the unemployment rate dipped slightly to 4.4% in December from 4.6% in November, while the annualized rate of increase in average hourly earnings rose to 3.8% from 3.6%.
Richmond Fed President Barkin said the declining unemployment rate is a positive sign, and job growth, while moderate, is stable. He added that it's difficult to find companies hiring outside of the healthcare or artificial intelligence sectors, and it's unclear whether the labor market will trend towards increased hiring or layoffs.
Gold's technical pattern signals a potential bearish reversal; a rising wedge pattern is emerging.
Daily chart technical analysis shows that gold prices are still within an emerging rising wedge pattern, indicating weakening upward momentum and warning that a break below the lower trendline of the wedge with significant trading volume could trigger a bearish reversal.
The 9-day exponential moving average (EMA, 4523.90) is above the 50-day EMA (4286.08), confirming a clear bullish bias. Gold prices are currently holding steady above the fast moving averages, and the 50-day EMA's slope continues to rise, highlighting medium-term upward pressure.
The Relative Strength Index (RSI) was in overbought territory on the 14th, indicating that although the trend remains unchanged, the momentum has been overstretched.
On the upside, the immediate resistance level is seen at $4,640, which coincides with the upper trendline of the rising wedge. A break above this multiple resistance level could see gold prices further rise towards the $4,660 level.
On the downside, initial support is at the 9-day EMA (4523.90), followed by the lower boundary of the rising wedge (around $4470).
(Spot gold daily chart, source: FX678)
At 15:18 Beijing time, spot gold was trading at $4634.86 per ounce.
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