Gold Price Prediction: XAU/USD Hits $4,600 Record as CPI and Fed Turmoil Stir Markets
Gold opened the week with a fresh all-time high above $4,600, driven by a sharp rise in safe-haven demand and renewed expectations...
Quick overview
- Gold reached a new all-time high above $4,600, driven by safe-haven demand and expectations of US interest-rate cuts.
- Geopolitical tensions, including potential military action against Iran and increased military presence in the Arctic, are pushing investors towards gold.
- A weakening US dollar, influenced by a criminal investigation involving Federal Reserve Chair Jerome Powell, is further supporting gold's price increase.
- Gold's technical outlook shows strong momentum, with key resistance at $4,601 and potential targets at $4,639 and $4,681.
Gold opened the week with a fresh all-time high above $4,600, driven by a sharp rise in safe-haven demand and renewed expectations of US interest-rate cuts. Investors are positioning ahead of Tuesday’s US CPI release, where economists expect headline inflation at 0.3% MoM and 2.7% YoY, with Core CPI forecast at 0.3% MoM. If inflation stays moderate, markets may strengthen bets on Federal Reserve easing—historically a major tailwind for gold, as lower rates reduce the opportunity cost of holding non-yielding assets.
Geopolitical tensions are providing an additional lift. CNN reports that President Donald Trump is weighing potential military action against Iran following deadly protests, stoking fears of escalation across the region. The UK and Germany are also boosting their Arctic military presence, while recent US actions in Venezuela have further unsettled markets. Each development has pushed investors toward safety, helping gold maintain its record-setting momentum.
Dollar Weakness Adds Fuel to Gold’s Upside Bias
Gold’s climb has also been supported by a weakening US dollar. The greenback slid after news of a criminal investigation involving Federal Reserve Chair Jerome Powell, focused on disclosures tied to the Fed headquarters renovation. The development sparked questions about Fed independence, adding uncertainty to the macro backdrop.
Softening labor data last week further pressured the dollar and strengthened rate-cut expectations. With both political and economic uncertainty rising, gold continues to attract inflows from investors seeking stability.
Gold Technical Outlook: XAU/USD Pauses Below $4,601 Before Another Push
Gold is currently trading near $4,573, easing slightly after testing the $4,601 resistance zone. A cluster of small-bodied candles near this level reflects hesitation after a rapid impulsive rally. Price has broken firmly above the ascending trendline that has guided the January advance, while both the 50-EMA and 100-EMA slope higher—evidence of strong underlying momentum.
However, the RSI near 73 indicates stretched conditions, suggesting buyers may wait for a shallow pullback before attempting another advance. Key supports sit at $4,550 and $4,500, where the trendline and prior breakout region converge. A sustained break above $4,601 would expose upside targets at $4,639 and $4,681, matching previous reaction highs.
Gold Outlook: Momentum Favors Bulls Ahead of CPI
Gold remains well-positioned for further gains as macro uncertainty, geopolitical tension, and a softening dollar intersect. Traders will watch CPI closely, but unless inflation comes in unexpectedly hot, the broader backdrop still favors higher gold prices.
Trade Setup: A confirmed close above $4,601 signals continuation toward $4,639, with potential extension toward $4,681 if momentum accelerates.
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