Gold Trading Alert: Gold Prices Reverse After Soaring! Can the Miracle Continue Amid Geopolitical Storms?
2026-01-30 07:56:06
The gold market experienced a dramatic rollercoaster ride on Thursday (January 29th), with spot gold prices quickly retreating after hitting record highs, only to recover most of their losses shortly afterward. This was the result of a confluence of factors. From easing concerns about the US government shutdown to a brief ceasefire signal in the Russia-Ukraine conflict, to the stalemate in US-Iran negotiations and Trump's calls for higher interest rates, these events collectively shaped gold's short-term trajectory. Although profit-taking triggered a sell-off, geopolitical uncertainty and economic policy expectations continued to provide solid support for gold prices. On Friday (January 30th) in early Asian trading, spot gold fluctuated higher, currently trading at $5442.75 per ounce, up approximately 1.3%.
Gold prices experienced significant volatility on Thursday, with spot gold surging to a record high of $5,596.33 per ounce before plummeting more than 5%, hitting an intraday low of $5,104.98, and ultimately closing at $5,377.14 per ounce, a decline of approximately 0.7%. This pattern of rising and falling was primarily due to profit-taking by investors after reaching record highs. David Megel, Director of Metals Trading at Gaoling Futures, pointed out that precious metals are facing a sharp sell-off after recently hitting record highs, reflecting the release of short-term overheated sentiment in the market.
Meanwhile, concerns about another US government shutdown eased, becoming a significant catalyst for long position liquidation. According to NBC News, Trump and Democrats reached a temporary funding agreement, averting a prolonged shutdown of most federal departments. This agreement aims to ease the dispute surrounding the budgets of the Department of Homeland Security and Immigration and Customs Enforcement. Although some agencies will experience temporary funding disruptions, the actual impact is limited due to most federal employees being on weekend leave. Trump emphasized on social media that he is working closely with Congress to ensure the government has sufficient funding, further calming market panic and prompting investors to lock in profits, putting short-term pressure on gold prices.
Furthermore, signs of easing tensions in the Russia-Ukraine conflict also fueled profit-taking. Trump stated that Russian President Putin had agreed to a week-long suspension of airstrikes on Kyiv and other Ukrainian cities to help Ukraine weather the harsh winter. Ukrainian President Zelensky expressed his anticipation, calling this "energy ceasefire" helpful in de-escalating the situation. Although Kremlin Press Secretary Peskov declined to comment, this news temporarily eased geopolitical concerns, prompting some long positions to exit. However, this pullback did not indicate a trend reversal; spot gold rose more than 1% to $5448.17 per ounce in early Asian trading on Friday, demonstrating market resilience.
Despite increased short-term selling pressure, escalating geopolitical uncertainty provided strong support for gold through bargain hunting. Potential US-Iran negotiations are currently stalled, with Iran sticking to its bottom line, while the US has raised its standards for an agreement, according to the Wall Street Journal. Mediation efforts by Arab countries such as Egypt, Qatar, Oman, and Saudi Arabia have yielded no results, and calls between the Egyptian foreign minister and the Iranian foreign minister, as well as Trump's special envoy, failed to make progress. Iranian President Pezechzian emphasized that if the US seeks negotiations, it must cease its provocative actions, otherwise regional tensions will escalate further.
Iran strongly condemned the EU's designation of the Islamic Revolutionary Guard Corps as a "terrorist organization," calling it an illegal and hostile move. Another US destroyer arrived in the Middle East, and Iran plans to conduct live-fire exercises in the Strait of Hormuz. Several countries have called on the US and Iran to resume dialogue to de-escalate tensions.
At the same time, Trump declared a national emergency and imposed tariffs on countries supplying oil to Cuba. This executive order, aimed at addressing potential threats, is subject to modification. This not only exacerbated geopolitical tensions in Central America but also triggered broader market unease.
These events collectively reinforced gold's appeal as a safe-haven asset, attracting investors to buy at lower prices and driving gold prices to quickly recover their losses.
Furthermore, holdings in the world's largest gold exchange-traded fund, SPDR Gold Trust, have risen to a near four-year high, and the CEO of currency group Tether stated plans to allocate 10%-15% of his portfolio to physical gold. These institutional moves have further solidified the basis for bargain hunting. Spot gold has risen approximately 24% so far this month and 7% this week, on track for its best monthly performance since the 1980s, thanks to persistent geopolitical risk premiums.
Besides geopolitical factors, uncertainty surrounding economic policy has also provided support for gold. Trump publicly stated on Thursday that interest rates should be 2 to 3 percentage points lower and plans to announce his successor to Federal Reserve Chairman Powell next week, suggesting a potentially more accommodative monetary policy in the future. Powell's term ends in May 2026, and Trump's remarks have fueled market expectations for further rate cuts, which typically weakens the dollar's appeal and thus benefits gold.
UBS maintains its bullish stance on gold, raising its price forecast for the first three quarters of this year to $6,200 per ounce, before expecting it to fall back to $5,900 per ounce by the end of 2026. The firm noted that in an upside scenario, gold prices could reach $7,200, while in a downside scenario they could fall to $4,600, reflecting continued concerns about economic uncertainty.
Today, the market will focus on the US December PPI data and speeches by Federal Reserve officials. If these data show that inflationary pressures are easing, it may further strengthen expectations of interest rate cuts and support a rebound in gold prices.
In contrast, spot silver's performance was more extreme. It rose as much as 4% intraday on Thursday, hitting a record high of $121.64, before plunging 8% to fall to $106.55, eventually closing down 1.11%. Silver prices have surged more than 60% this month, driven by supply shortages and speculative funds. Guy Wolf, global head of market analysis at Marex, stated that the silver market is relatively small and susceptible to speculation, causing prices to decouple from physical demand, contrasting with the relative stability of gold.
In conclusion, while the pullback in gold prices was influenced by profit-taking and easing short-term concerns, geopolitical tensions, economic policy expectations, and institutional allocation demand collectively provided a solid support foundation. Despite increased market volatility, gold's status as the king of safe havens remains unchanged. Looking ahead, if US-Iran negotiations fail, the Russia-Ukraine ceasefire is unlikely to continue, or the Federal Reserve signals a dovish stance, gold prices still have the potential to test $6,200. Investors should closely monitor the situation in the Middle East and Russia-Ukraine, news related to Trump, and the developments of the US government shutdown, as these factors will determine the next direction of gold prices. In an era dominated by uncertainty, gold will continue to play a key role in helping investors hedge against risk.
(Spot gold daily chart, source: FX678)
At 07:53 Beijing time, spot gold was trading at $5440.34 per ounce.
Gold prices have peaked and retreated: Profit-taking by bulls is driving short-term volatility.
Gold prices experienced significant volatility on Thursday, with spot gold surging to a record high of $5,596.33 per ounce before plummeting more than 5%, hitting an intraday low of $5,104.98, and ultimately closing at $5,377.14 per ounce, a decline of approximately 0.7%. This pattern of rising and falling was primarily due to profit-taking by investors after reaching record highs. David Megel, Director of Metals Trading at Gaoling Futures, pointed out that precious metals are facing a sharp sell-off after recently hitting record highs, reflecting the release of short-term overheated sentiment in the market.
Meanwhile, concerns about another US government shutdown eased, becoming a significant catalyst for long position liquidation. According to NBC News, Trump and Democrats reached a temporary funding agreement, averting a prolonged shutdown of most federal departments. This agreement aims to ease the dispute surrounding the budgets of the Department of Homeland Security and Immigration and Customs Enforcement. Although some agencies will experience temporary funding disruptions, the actual impact is limited due to most federal employees being on weekend leave. Trump emphasized on social media that he is working closely with Congress to ensure the government has sufficient funding, further calming market panic and prompting investors to lock in profits, putting short-term pressure on gold prices.
Furthermore, signs of easing tensions in the Russia-Ukraine conflict also fueled profit-taking. Trump stated that Russian President Putin had agreed to a week-long suspension of airstrikes on Kyiv and other Ukrainian cities to help Ukraine weather the harsh winter. Ukrainian President Zelensky expressed his anticipation, calling this "energy ceasefire" helpful in de-escalating the situation. Although Kremlin Press Secretary Peskov declined to comment, this news temporarily eased geopolitical concerns, prompting some long positions to exit. However, this pullback did not indicate a trend reversal; spot gold rose more than 1% to $5448.17 per ounce in early Asian trading on Friday, demonstrating market resilience.
Geopolitical uncertainty remains severe: the US-Iran stalemate and the declaration of a state of emergency provide support.
Despite increased short-term selling pressure, escalating geopolitical uncertainty provided strong support for gold through bargain hunting. Potential US-Iran negotiations are currently stalled, with Iran sticking to its bottom line, while the US has raised its standards for an agreement, according to the Wall Street Journal. Mediation efforts by Arab countries such as Egypt, Qatar, Oman, and Saudi Arabia have yielded no results, and calls between the Egyptian foreign minister and the Iranian foreign minister, as well as Trump's special envoy, failed to make progress. Iranian President Pezechzian emphasized that if the US seeks negotiations, it must cease its provocative actions, otherwise regional tensions will escalate further.
Iran strongly condemned the EU's designation of the Islamic Revolutionary Guard Corps as a "terrorist organization," calling it an illegal and hostile move. Another US destroyer arrived in the Middle East, and Iran plans to conduct live-fire exercises in the Strait of Hormuz. Several countries have called on the US and Iran to resume dialogue to de-escalate tensions.
At the same time, Trump declared a national emergency and imposed tariffs on countries supplying oil to Cuba. This executive order, aimed at addressing potential threats, is subject to modification. This not only exacerbated geopolitical tensions in Central America but also triggered broader market unease.
These events collectively reinforced gold's appeal as a safe-haven asset, attracting investors to buy at lower prices and driving gold prices to quickly recover their losses.
Furthermore, holdings in the world's largest gold exchange-traded fund, SPDR Gold Trust, have risen to a near four-year high, and the CEO of currency group Tether stated plans to allocate 10%-15% of his portfolio to physical gold. These institutional moves have further solidified the basis for bargain hunting. Spot gold has risen approximately 24% so far this month and 7% this week, on track for its best monthly performance since the 1980s, thanks to persistent geopolitical risk premiums.
Economic policy expectations are rising: Trump's calls for higher interest rates and signals from the Federal Reserve are boosting demand.
Besides geopolitical factors, uncertainty surrounding economic policy has also provided support for gold. Trump publicly stated on Thursday that interest rates should be 2 to 3 percentage points lower and plans to announce his successor to Federal Reserve Chairman Powell next week, suggesting a potentially more accommodative monetary policy in the future. Powell's term ends in May 2026, and Trump's remarks have fueled market expectations for further rate cuts, which typically weakens the dollar's appeal and thus benefits gold.
UBS maintains its bullish stance on gold, raising its price forecast for the first three quarters of this year to $6,200 per ounce, before expecting it to fall back to $5,900 per ounce by the end of 2026. The firm noted that in an upside scenario, gold prices could reach $7,200, while in a downside scenario they could fall to $4,600, reflecting continued concerns about economic uncertainty.
Today, the market will focus on the US December PPI data and speeches by Federal Reserve officials. If these data show that inflationary pressures are easing, it may further strengthen expectations of interest rate cuts and support a rebound in gold prices.
In contrast, spot silver's performance was more extreme. It rose as much as 4% intraday on Thursday, hitting a record high of $121.64, before plunging 8% to fall to $106.55, eventually closing down 1.11%. Silver prices have surged more than 60% this month, driven by supply shortages and speculative funds. Guy Wolf, global head of market analysis at Marex, stated that the silver market is relatively small and susceptible to speculation, causing prices to decouple from physical demand, contrasting with the relative stability of gold.
Looking ahead: Potential upside potential in gold amid bullish and bearish battles
In conclusion, while the pullback in gold prices was influenced by profit-taking and easing short-term concerns, geopolitical tensions, economic policy expectations, and institutional allocation demand collectively provided a solid support foundation. Despite increased market volatility, gold's status as the king of safe havens remains unchanged. Looking ahead, if US-Iran negotiations fail, the Russia-Ukraine ceasefire is unlikely to continue, or the Federal Reserve signals a dovish stance, gold prices still have the potential to test $6,200. Investors should closely monitor the situation in the Middle East and Russia-Ukraine, news related to Trump, and the developments of the US government shutdown, as these factors will determine the next direction of gold prices. In an era dominated by uncertainty, gold will continue to play a key role in helping investors hedge against risk.
(Spot gold daily chart, source: FX678)
At 07:53 Beijing time, spot gold was trading at $5440.34 per ounce.
- 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.
