Gold Price Forecast: XAU/USD continues scaling record highs amid global flight to safety

Gold continues to attract safe-haven flows amid the prevalent US Dollar selling bias.
Reduced Fed rate cut bets fail to impress the USD bulls or hinder the positive move.
Traders now look to the US PCE Price Index on Thursday for some meaningful impetus.

Haresh Menghani FXStreet

Gold (XAU/USD) attracts some buyers for the second consecutive day and touches a fresh record high during the Asian session on Tuesday on the back of sustained safe-haven demand. US President Donald Trump turned the heat up and threatened to impose more tariffs against European allies amid rising tension over Greenland. The announcement prompted ‌the European Union (EU) to weigh hitting back with previously untested economic countermeasures should the levies go ahead on February 1, fueling worries that the trade war could re-escalate. This, along with geopolitical uncertainties stemming from the protracted Russia-Ukraine war, tempers investors' appetite for riskier assets and ignites a global flight to safety.

Russia launched a barrage of drone strikes on Ukraine's energy infrastructure overnight on Monday, triggering widespread power outages across the country amid freezing temperatures and high demand. Moreover, Russian forces launched a combined drone and missile attack on the Ukrainian capital of Kyiv early on Tuesday. This overshadows subsiding civil unrest in Iran that reduces the likelihood of a US intervention and continues to underpin the Gold. Meanwhile, the US Dollar (USD) drifts lower for the second consecutive day and moves away from its highest level since December 9, touched last week. This contributes to the commodity's move up to the $4,700 mark and backs the case for a further near-term appreciating move.

Trump's renewed tariff threats have revived talk of the 'Sell America' trade, which, in turn, is seen weighing on the USD, despite diminishing odds for more aggressive policy easing by the Federal Reserve (Fed). Trump said last week that he would prefer to keep National Economic Council director Kevin Hassett in his current role. This suggests that someone else will succeed the outgoing Fed Chair Jerome Powell, prompting traders to trim their bets for two more interest rate cuts in 2026. The USD bulls, however, opt to wait for the release of the US Personal Consumption Expenditure (PCE) Price Index on Thursday, which, along with the final US Q3 GDP, should offer more cues about the Fed's policy path and drive the non-yielding Gold.

XAU/USD daily chart

Technical Analysis:

The ascending channel from $3,845.01 frames the advance, with resistance near $4,709.97 as the Gold price tests the upper boundary. The Moving Average Convergence Divergence (MACD) stands in positive territory and has improved over recent sessions, suggesting strengthening bullish momentum. RSI at 71.90 is overbought, which could cap immediate gains and prompt some near-term consolidation.

A pullback could draw bids toward channel support at $4,401.82, thereby preserving the rising structure and maintaining higher lows. Should momentum cool, the MACD would be at risk of contracting toward the zero line, but a firm stance above it would sustain the bullish tone. RSI easing from overbought would relieve pressure; a hold above the 50 midline would keep buyers in control while the channel continues to guide the trend.

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

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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