Gold stands firm near record high; $5,100 remains in sight amid flight to safety, weak USD
- Gold buying remains unabated for the sixth straight day amid sustained safe-haven demand.
- The ‘Sell America’ trade weighs heavily on the USD and further benefits the XAU/USD pair.
- Dovish Fed expectations contribute to the move higher ahead of the FOMC policy meeting.
Gold (XAU/USD) enters a bullish consolidation phase near the all-time peak touched during the Asian session on Monday and seems poised to appreciate further amid a supportive fundamental backdrop. 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), sustained buying by central banks, and record inflows into exchange-traded funds remain supportive of the relentless rally.
Meanwhile, investors have been moving out of US assets amid heightened economic and policy risk linked to US President Donald Trump's tariff threats. Moreover, the attack on the Fed's independence and concerns over government debt levels dragged the US Dollar (USD) to its lowest level since September 2025, lending additional support to the Gold. Traders now look to the outcome of a two-day FOMC meeting on Wednesday for cues about the Fed's rate-cut path, which will drive the USD demand and the non-yielding yellow metal.
Daily Digest Market Movers: Gold bulls retain control amid sustained safe-haven buying, USD weakness
- The recent short-lived escalation of friction between the United States and NATO over Greenland raised some doubts about trust in the alliance. Moreover, Ukraine and Russia ended a second day of US-brokered talks in Abu Dhabi on Saturday without a deal.
- Adding to this, US President Donald Trump said on Saturday he would impose a 100% tariff on Canada if it follows through on a trade deal with China. This continues to lift the safe-haven Gold to new all-time highs for the sixth consecutive day on Monday.
- This comes on top of the broader de-dollarization trend and bets that the US Federal Reserve would cut interest rates two more times in 2026, which drags the US Dollar to a four-month low and turns out to be another factor that benefits the precious metal.
- China's central bank 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 through early 2026.
- Furthermore, 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.
- The 'Sell America' sentiment gained momentum in recent weeks due to the Greenland tariff dispute, the US government’s attack on the Federal Reserve's independence, and enduring concerns over government debt levels. This further underpins the commodity.
- The market focus now shifts to the highly anticipated two-day FOMC meeting, starting on Tuesday. The Fed is scheduled to announce its decision on Wednesday, though the focus will be on the accompanying statement and the post-meeting press conference.
- Fed Chair Jerome Powell's comments will be scrutinized for cues about the future policy path, which would drive the USD and the non-yielding yellow metal. In the meantime, US Durable Goods Orders could produce short-term opportunities on Monday.
Gold consolidates near ascending channel resistance amid overbought conditions
The ascending channel from $4,464.07 underpins the uptrend, with resistance near $5,099.04. The XAU/USD pair hovers close to the upper boundary, where rallies tend to stall. A clear breakout could extend the climb, while a rejection at this barrier would keep the advance capped within the channel.
The Moving Average Convergence Divergence (MACD) line holds above the Signal line and above zero, and the positive histogram is expanding, suggesting strengthening bullish momentum. The RSI stands at 80.76, indicating stretched conditions that could precede a pause. Should momentum cool, support aligns with the channel floor near $4,932.75. Holding that base would preserve the bullish structure, whereas a decisive break lower would signal a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -2.29% | -2.26% | -2.18% | -1.65% | -3.45% | -3.59% | -2.94% | |
| EUR | 2.29% | 0.02% | 0.07% | 0.65% | -1.20% | -1.34% | -0.67% | |
| GBP | 2.26% | -0.02% | -0.17% | 0.63% | -1.22% | -1.36% | -0.69% | |
| JPY | 2.18% | -0.07% | 0.17% | 0.57% | -1.27% | -1.39% | -0.74% | |
| CAD | 1.65% | -0.65% | -0.63% | -0.57% | -1.81% | -1.95% | -1.31% | |
| AUD | 3.45% | 1.20% | 1.22% | 1.27% | 1.81% | -0.14% | 0.57% | |
| NZD | 3.59% | 1.34% | 1.36% | 1.39% | 1.95% | 0.14% | 0.68% | |
| CHF | 2.94% | 0.67% | 0.69% | 0.74% | 1.31% | -0.57% | -0.68% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
