Gold climbs to a two-week high: Markets await a softer Fed policy

Gold on Wednesday held above 5045 USD per ounce and traded near a two-week high. The quotes are supported by expectations of a softer Fed policy.

Growth intensified after weak US economic data. Retail sales came in below forecasts in December, pointing to a slowdown in consumer activity and fuelling fears of a cooling economy.

The market is now pricing in a higher probability of three Fed rate cuts this year than two weeks ago.

Investors are now awaiting the publication of US data on employment and inflation, which may provide additional signals about the state of the economy and the regulator’s next steps.

Demand from central banks remains robust. The People’s Bank of China increased gold reserves in January

Technical analysis

The H4 XAU/USD chart shows that after a sharp collapse in early February from the 5550–5600 area to lows around 4400, gold has entered a recovery phase. The price has stabilised around 5000–5050 and is trading near the middle line of the Bollinger Bands. The bands are gradually narrowing, indicating declining volatility and the formation of consolidation following strong price swings.

On the H1 chart, the structure is more neutral. Quotes are moving within a narrow 5000–5080 range. The upper boundary acts as local resistance, while the lower acts as support. The market looks balanced, with attempts at a steady advance, but no pronounced momentum.

Conclusion

In summary, gold’s rally to a two-week high primarily reflects shifting market expectations towards a more dovish Fed, amplified by recent soft US retail data. While technical indicators show stabilisation and consolidation within a recovery phase, price action remains range-bound and lacks decisive momentum. The near-term trajectory will be critically dependent on incoming US inflation and employment data, which will either validate the current dovish repricing or challenge it. Sustained central bank buying and unresolved geopolitical tensions provide a structural floor, but for a breakout above the current consolidation, gold requires a clear catalyst from upcoming macroeconomic releases.