Gold Price Forecast: XAU/USD bulls seem unstoppable amid the global flight to safety

Gold (XAU/USD) prolongs its record-setting rally for the sixth consecutive day and advances to the $5,100 neighborhood during the Asian session on Monday. Investors continue to take refuge in traditional safe-haven assets amid persistent geopolitical and trade-related uncertainties. Moreover, prospects for further policy easing by the US Federal Reserve (Fed), the prevalent US Dollar (USD) selling bias, sustained buying by central banks, and record inflows into exchange-traded-funds provide a strong boost to the commodity.

US President Donald Trump withdrew his tariff threat after claiming that a framework deal had been reached for a future deal on Greenland with NATO. The short-lived crisis, however, raised some doubts on trust in the alliances, which, along with the protracted Russia-Ukraine war, continues to drive safe-haven flows towards the Gold. Russia launched another massive attack on Ukraine, using drones and missiles on the second day of US-brokered peace talks in Abu Dhabi on Saturday, which ended without a deal. The trilateral talks in the UAE will resume on February 1, though hopes for a breakthrough in the nearly four-year war remain dim, keeping geopolitical risks in play.

Trump threatened on Saturday that he would impose a 100% tariff on Canada if it follows through on a trade deal with China. Moreover, the risk of a future US escalation on Greenland and other policy shocks from the Trump administration has tarnished the USD's reputation in global financial markets. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, slumps to its lowest level since September 2025 and is further pressured by bets that the Fed would lower borrowing costs two more times in 2025. This turns out to be another factor that benefits the non-yielding Gold as the market focus now shifts to a two-day FOMC meeting, starting on Tuesday.

The Fed is scheduled to announce its policy decision on Wednesday and is widely expected to leave interest rates unchanged. Hence, the spotlight will be on the accompanying policy statement and Fed Chair Jerome Powell's comments during the post-meeting press conference. Investors will look for more cues about the Fed's policy outlook and future rate-cut path, which, in turn, will play a key role in influencing the near-term USD price dynamics and determining the next leg of a directional move for the Gold. In the meantime, Monday's release of the US Durable Goods Orders data might produce short-term trading opportunities later during the North American session.

Meanwhile, the People's Bank of China (PBOC) extended its gold-buying spree for a fourteenth month in December. Moreover, emerging market central banks – the National Bank of Poland, Reserve Bank of India, and Central Bank of Brazil – were active buyers in late 2025 and early 2026. Adding to this, global demand for investments in gold through exchange-traded funds increased by 25% in 2025. In fact, gold holdings increased to 4,025.4 tonnes from 3224.2 tonnes in 2024, and the total Assets Under Management in ETFs stood at $558.9 billion. This further underpins the Gold and backs the case for an extension of the recent well-established uptrend and a supportive fundamental backdrop.

XAU/USD 4-hour chart

Technical Analysis

The ascending channel from $4,464.07 underpins the uptrend, with gains capped near $5,101.21. The Moving Average Convergence Divergence (MACD) remains positive and the histogram has begun to contract, suggesting momentum has cooled even as the MACD line holds above the Signal line. The Relative Strength Index sits at 78 (overbought), which could restrain immediate upside and encourage consolidation near the channel boundary.

If the Gold price fails to pierce the channel’s upper band, a pullback could unfold toward support at $4,934.92. A deeper loss of momentum, reflected by further MACD histogram contraction, would reinforce a corrective bias, while an RSI rollover from overbought would favor mean reversion within the channel. Conversely, sustained strength while MACD holds positive would keep the broader bullish structure intact and preserve the upward bias defined by the rising channel.

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