XAU/USD. Analysis and Forecast

[Ben Graham]

Gold has set a new all-time high and is now partially trimming its intraday gains. Nevertheless, any meaningful corrective decline looks unlikely amid a favorable fundamental backdrop.

On Saturday, Donald Trump threatened to impose additional 10% tariffs on European goods from eight countries starting February 1, linking the move to the refusal to approve a deal for the acquisition of Greenland. Trump specified that the rate would rise to 25% in June if no agreement is reached. Leading EU countries described the tariff threats tied to the Greenland issue as blackmail, while Paris proposed responding with previously unused economic countermeasures. This situation has once again intensified fears of trade conflicts, pushing gold—viewed as a safe-haven asset—to a new record high.

Amid escalating confrontation with Washington, Iran issued another warning that any attempt on the life of Supreme Leader Ayatollah Ali Khamenei could trigger a large-scale war. Added to this is the escalation of the Russia–Ukraine conflict, which is sustaining geopolitical tensions and further strengthening gold's position as a safe-haven asset. Ukraine's Foreign Minister Andrii Sybiha stated that there is evidence Moscow is considering strikes on critical infrastructure linked to nuclear power plants. President Volodymyr Zelensky added that Russian attacks have demonstrated a lack of interest in diplomatic settlement or ending the conflict.Trump said he prefers to keep National Economic Council Director Kevin Hassett in his current position, hinting at the appointment of another candidate to replace Fed Chair Jerome Powell. This prompted investors to scale back expectations of more aggressive Fed policy easing. Nevertheless, the US dollar continues to struggle despite a reassessment of the likelihood of Fed rate cuts in 2026, retreating significantly from the January high recorded on December 9 last week. This is an additional factor contributing to the strong intraday rally in the precious metal.

For better trading opportunities, attention should be paid to the release of the US Personal Consumption Expenditures (PCE) price index and the final estimate of US Q3 GDP on Thursday, which are expected to provide fresh momentum for the dollar and, consequently, for the precious metal. However, the fundamental picture appears to favor gold buyers and confirms the potential for the continuation of the uptrend.

From a technical perspective, it is worth noting that oscillators on the daily chart are in overbought territory, signaling a potential price correction. The yellow metal has found solid support at the 4,630 level. Failure to hold this level would see prices decline toward 4,560.

The material has been provided by InstaForex Company - www.instaforex.com