Gold Market Update: XAU/USD Defends $4,855 as “Dip-Buyers” Charge Toward $5,000
Gold is making gains this Wednesday, showing a strong recovery after a stretch of high volatility in the precious metals market.
Quick overview
- Gold prices have rebounded by about 1.1%, trading near $4,934 per ounce after a period of volatility.
- Major investment banks are predicting a long-term bull market, viewing the recent dip as a buying opportunity.
- Key factors driving gold's potential rise include central banks' de-dollarization efforts, persistent inflation, and geopolitical risks.
- Technical analysis indicates that maintaining support above $4,855 is crucial for sustaining the current bullish trend.
Gold is making gains this Wednesday, showing a strong recovery after a stretch of high volatility in the precious metals market. Spot gold prices are up about 1.1%, trading near $4,934 per ounce, which is a clear rebound from recent sharp lows.
Major investment banks such as J.P. Morgan and UBS are signaling a long-term bull market. Today’s price movement shows that experienced investors see the current dip as a good buying opportunity, not a sign of collapse.
The Rebound: Why Gold is Gaining Strength Again
This mid-week rally comes from a change in market sentiment. Earlier in the week, gold dropped nearly 2% because of a stronger US Dollar and profit-taking, but now the focus is returning to long-term demand.
- Bargain Hunting: After gold fell to $4,867, institutional investors started buying aggressively, seeing prices below $4,900 as undervalued compared to what they expect for inflation in 2026.
- Reassessment: While the nomination of Kevin Warsh as the next Fed Chair initially spooked the market with a “hawkish” chill, traders are now betting that persistent economic uncertainty will force the Fed to maintain a flexible rate-cut path.
- Asian Holiday Quiet: With China’s markets closed for the Lunar New Year, there has been less selling pressure from Asia, giving Western investors more influence over the market.
Fundamentals: The “Big Three” Drivers for 2026
To see why gold could reach record highs by the end of the year, new investors should consider these three main factors:
1. The De-Dollarization Wave
Central banks are buying gold at levels not seen in decades. Countries such as China and India are moving their reserves away from the US Dollar to protect themselves from geopolitical risks and currency devaluation.
2. Inflation as a “Sticky” Reality
Despite the Fed’s efforts, US inflation is still at 2.4%. Gold is a reliable hedge; while cash loses value over time, gold tends to keep its worth.
3. Geopolitical Safe-Haven Demand
Ongoing US-Iran nuclear talks and changes in global trade tariffs mean that risk remains high in 2026. Gold stands out because it does not depend on any government’s promise to pay, so it carries no counterparty risk.
Gold Technical Analysis: Bulls Defend the $4,855 Line
The 2-hour chart shows a struggle for momentum. Gold has held above the $4,855 rising trendline, which is an important technical support level.
| Key Technical Level | Price (USD) | Significance |
| Major Resistance | $5,120 | The “Bull Gateway”; a break here opens the path to $5,500. |
| Immediate Resistance | $4,973 | Aligns with the 50-period EMA; today’s primary target. |
| Pivot Support | $4,855 | The ascending trendline that must hold to keep the bull run alive. |
| Emergency Floor | $4,800 | A breach here would signal a deeper correction toward $4,500. |
The Verdict: A Structural Bull in Training
The recent drop to $4,880–$4,934 looks more like a technical adjustment than a change in trend. Analysts from firms like Goldman Sachs and Deutsche Bank expect an average price of $5,055 by the fourth quarter of 2026, so the long-term outlook is very positive.
Investor Tip: Keep an eye on the $4,975 level. If gold stays above this point, it could spark a rally and test the $5,120 resistance level by the end of the week.
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