Gold retreats slightly from record high amid some profit-taking; bullish potential intact

• Gold scales new all-time peaks for the ninth day in a row amid sustained safe-haven buying.
• Concerns about the Fed’s independence weigh on the USD and benefit the precious metal.
• The XAU/USD bulls seem rather unaffected by overbought conditions on short-term charts.

Gold (XAU/USD) trims a part of its strong intraday gains to a fresh all-time peak touched earlier this Thursday and trades below the $5,550 level during the first half of the European session, still up for the ninth straight day. A modest intraday pullback lacks any fundamental catalyst and could be attributed to some profit-taking following a $600 strong rally since the beginning of this week. However, a combination of supporting factors might continue to act as a tailwind for the bullion, warranting caution for bearish traders.

Investors continue to seek refuge in traditional safe-haven assets on the back of which have been fueling the precious metal's parabolic rise of more than 10% this week. Furthermore, the emergence of fresh US Dollar (USD), along with concerns about the US Federal Reserve's (Fed) independence, might further contribute to limiting the downside for the non-yielding Gold. This, in turn, suggests that any meaningful corrective pullback might still be seen as a buying opportunity and is more likely to remain cushioned.

Daily Digest Market Movers: Gold bulls retain control amid the global flight to safety

• Concerns that US tariff increases from last year continue to weigh on the global economic outlook resurfaced after Germany – the Eurozone's biggest economy – on Wednesday lowered its growth forecasts for this and next year.
• US President Donald Trump warned Iran to come to the table and make a deal on nuclear weapons, or future US attacks would be far worse. Iran responded with a threat to strike against the US, Israel, and those who support them.
• In other geopolitical developments, Russia continues with its aerial attacks on Ukrainian cities and infrastructure. The latest attack involved a Russian drone strike on a passenger train in northeastern Ukraine that killed five people.
• This, along with the emergence of fresh US Dollar selling, assists the safe-haven Gold to prolong the record-setting rally for the ninth straight day and climb to the $5,600 neighborhood during the Asian session on Thursday.
• The US Federal Reserve, as was anticipated, decided to leave rates unchanged at the end of a two-day meeting on Wednesday. Two Fed Governors – Stephen Miran and Christopher Waller – dissented in favor of a 25 basis-points cut.
• In the post-meeting press conference, Fed Chair Jerome Powell said that inflation was still well above the 2% target. The muted market reaction, however, suggests that investors remain concerned about threats to the Fed's independence.
• A criminal investigation of Powell by the Department of Justice and an evolving effort to fire Fed Governor Lisa Cook put the focus on the freedom of monetary authorities from direct political interference in formulating policies.
• Meanwhile, traders seem convinced that the Fed will maintain the status quo through the end of this quarter and possibly until Chair Jerome Powell's tenure ends in May, though they are still pricing in two more rate cuts in 2026.
• The outlook, in turn, fails to assist the US Dollar to build on the previous day's modest recovery from a nearly four-year low and turns out to be another factor that provides an additional boost to the non-yielding yellow metal.
• Traders now look to Thursday's release of the usual Weekly Initial Jobless Claims data from the US for a short-term impetus. The supportive fundamental backdrop, however, remains tilted firmly in favor of the XAU/USD bulls.

Gold pauses for a breather amid extremely overbought RSI

The overnight breakout through a short-term ascending channel hurdle near $5,303.94 keeps the bullish tone intact. Moreover, the Moving Average Convergence Divergence (MACD) line extends above the Signal line, with both above zero, and the histogram is widening, suggesting strengthening upside momentum.

However, the Relative Strength Index (RSI) sits at 88 (overbought), which could cap immediate advances and prompt a pause. Should momentum cool, initial support aligns with the channel’s lower boundary at $5,135.11, where buyers could re-emerge. A contraction in the MACD histogram would hint at a fading impulse, while the RSI easing from overbought would normalize conditions; even so, holding above former channel resistance would preserve the broader bullish bias and keep pullbacks orderly within the rising structure.

(The technical analysis of this story was written with the help of an AI tool.)