Gold prices suddenly pulled back! Geopolitical risks subsided, and technical indicators showed overbought conditions, triggering a "profit-taking" warning.
2026-01-23 16:42:04
On Friday (January 23), spot gold prices fluctuated downwards during the European session, currently trading around $4,920 per ounce. It had reached a record high of $4,967.19 per ounce during the Asian session, with a daily decline of approximately 0.31%. The shift in US President Trump's stance on Greenland eased geopolitical tensions, partially reducing safe-haven buying and putting downward pressure on gold prices.
Trump not only withdrew his threat to impose tariffs on eight European countries but also ruled out the possibility of seizing Greenland by force. This shift generally maintained positive market sentiment and may weaken demand for traditional safe-haven assets.
Meanwhile, the US dollar index rebounded slightly and is currently trading around 98.45, putting some pressure on gold prices. At the same time, the daily chart shows that gold is in an extremely overbought state, and coupled with the optimistic sentiment in global stock markets, this may dampen traders' new bullish bets on safe-haven gold.
With the market widely expecting the Federal Reserve to cut interest rates at least twice more this year, the US dollar seems unlikely to appreciate substantially. This will continue to support gold, a non-interest-bearing asset, meaning that any pullback is more likely to be seen as a buying opportunity, and the downside may be limited.
US President Trump withdrew his threat to impose tariffs on Europe on Wednesday and announced that he had reached an agreement with NATO on a framework for a future agreement on Greenland, easing market concerns.
The U.S. Bureau of Economic Analysis released its final reading of third-quarter GDP, showing that the economy grew by 4.4%, slightly better than the previously estimated 4.3%, and significantly higher than the 3.8% growth rate in the previous quarter.
Another report showed that the Federal Reserve's preferred inflation gauge—the core personal consumption expenditures price index—rose 2.8% year-on-year in November, up from 2.7% in the previous month. On a monthly basis, the index remained stable, increasing by 0.2%.
In addition, the U.S. Labor Department reported that seasonally adjusted initial jobless claims rose by 1,000 to 200,000 in the week ending January 17. This figure was lower than the market consensus of 212,000, but failed to boost the confidence of dollar bulls.
Investors appear confident that the Federal Reserve will keep key interest rates unchanged until the end of this quarter, and possibly until May when Chairman Jerome Powell's term ends. However, the market still expects two more rate cuts in 2026, which continues to put pressure on the dollar.
Market focus has now shifted to the two-day Federal Open Market Committee (FOMC) policy meeting, which begins next Tuesday. Investors will be looking for clues about the Fed's interest rate path, which will have a key impact on the short-term movement of the dollar and provide significant momentum for gold, a non-interest-bearing asset.
Gold prices broke through the upper trendline of the upward channel that extended from the end of October this week, which is seen as a major catalyst for gold bulls and confirms the positive outlook in the near term.
The Moving Average Convergence Divergence (MACD) indicator is above the signal line, both are above the zero axis, and the positive histogram continues to expand, indicating that bullish momentum remains. However, the Relative Strength Index (RSI) is near 80, indicating that the market is overbought and may put downward pressure on gold prices, although a breakout would still favor the continuation of the upward trend.
While current fundamental support remains strong, the overextended technical pattern also poses downside risks – if buying momentum weakens, gold prices could fall back to around $4,437, near the lower channel line.
As long as the price remains above the previous channel resistance, the overall upward trend is likely to continue after a pullback.
(Spot gold daily chart, source: FX678)
At 16:36 Beijing time, spot gold was trading at $4920.28 per ounce.
Trump not only withdrew his threat to impose tariffs on eight European countries but also ruled out the possibility of seizing Greenland by force. This shift generally maintained positive market sentiment and may weaken demand for traditional safe-haven assets.
Meanwhile, the US dollar index rebounded slightly and is currently trading around 98.45, putting some pressure on gold prices. At the same time, the daily chart shows that gold is in an extremely overbought state, and coupled with the optimistic sentiment in global stock markets, this may dampen traders' new bullish bets on safe-haven gold.
With the market widely expecting the Federal Reserve to cut interest rates at least twice more this year, the US dollar seems unlikely to appreciate substantially. This will continue to support gold, a non-interest-bearing asset, meaning that any pullback is more likely to be seen as a buying opportunity, and the downside may be limited.
A rebound in the US dollar and a decrease in safe-haven demand have led to a temporary retreat of gold bulls.
US President Trump withdrew his threat to impose tariffs on Europe on Wednesday and announced that he had reached an agreement with NATO on a framework for a future agreement on Greenland, easing market concerns.
The U.S. Bureau of Economic Analysis released its final reading of third-quarter GDP, showing that the economy grew by 4.4%, slightly better than the previously estimated 4.3%, and significantly higher than the 3.8% growth rate in the previous quarter.
Another report showed that the Federal Reserve's preferred inflation gauge—the core personal consumption expenditures price index—rose 2.8% year-on-year in November, up from 2.7% in the previous month. On a monthly basis, the index remained stable, increasing by 0.2%.
In addition, the U.S. Labor Department reported that seasonally adjusted initial jobless claims rose by 1,000 to 200,000 in the week ending January 17. This figure was lower than the market consensus of 212,000, but failed to boost the confidence of dollar bulls.
Investors appear confident that the Federal Reserve will keep key interest rates unchanged until the end of this quarter, and possibly until May when Chairman Jerome Powell's term ends. However, the market still expects two more rate cuts in 2026, which continues to put pressure on the dollar.
Market focus has now shifted to the two-day Federal Open Market Committee (FOMC) policy meeting, which begins next Tuesday. Investors will be looking for clues about the Fed's interest rate path, which will have a key impact on the short-term movement of the dollar and provide significant momentum for gold, a non-interest-bearing asset.
Gold's daily relative strength index (RSI) is extremely overbought, putting downward pressure, but bullish potential still seems to exist.
Gold prices broke through the upper trendline of the upward channel that extended from the end of October this week, which is seen as a major catalyst for gold bulls and confirms the positive outlook in the near term.
The Moving Average Convergence Divergence (MACD) indicator is above the signal line, both are above the zero axis, and the positive histogram continues to expand, indicating that bullish momentum remains. However, the Relative Strength Index (RSI) is near 80, indicating that the market is overbought and may put downward pressure on gold prices, although a breakout would still favor the continuation of the upward trend.
While current fundamental support remains strong, the overextended technical pattern also poses downside risks – if buying momentum weakens, gold prices could fall back to around $4,437, near the lower channel line.
As long as the price remains above the previous channel resistance, the overall upward trend is likely to continue after a pullback.
(Spot gold daily chart, source: FX678)
At 16:36 Beijing time, spot gold was trading at $4920.28 per ounce.
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