Gold recovers major part of intraday losses to sub-$4,800 levels; down a little on firmer USD

Gold (XAU/USD) rebounds swiftly following the Asian session fall to sub-$4,800 levels and climbs back above the $4,900 mark in the last hour, though the upside potential seems limited. Wednesday's softer US ADP report pointed to labor market weakness and strengthened the case for interest rate cuts by the Federal Reserve (Fed), lending support to the non-yielding yellow metal. This, along with geopolitical uncertainties, contributes to limiting the downside for the safe-haven commodity.

Meanwhile, the US Dollar (USD) climbs to a two-week high and looks to build on its recent goodish recovery move from a four-year low, which might keep a lid on a further upside for the Gold price. On the geopolitical front, Iran and the US have agreed to hold talks in Oman on Friday, easing concerns over a military confrontation. This, along with a fall in China's gold consumption in 2025, should act as a headwind for the XAU/USD pair ahead of more US labor market reports later today.

Daily Digest Market Movers: Gold traders seem non-committal amid mixed fundamental cues

• China's gold consumption in 2025 fell 3.57% to 950.096 metric tons, the state-backed association said on Thursday. Gold output using domestic raw materials climbed 1.09% year on year to 381.339 metric tons, the association added.
• US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair fueled speculation that the central bank will be less dovish than expected. This assists the US Dollar in gaining some follow-through positive traction.
• Trump, however, said that he would have passed on Kevin Warsh as his nominee for the Fed Chair if he had expressed a desire to hike interest rates and that there was not much doubt that the US central bank would lower interest rates.
• Moreover, traders are still pricing in the possibility that the Fed will lower borrowing costs two more times this year. The bets were further reaffirmed by Wednesday's disappointing release of the US private-sector employment data.
• In fact, the Automatic Data Processing (ADP) Research Institute reported that private-sector employers added 22K new jobs in January, down from the previous month's downwardly revised reading of 37K and 48K consensus estimates.
• Separately, the US ISM Services PMI held steady at 53.8 in January and pointed to another robust expansion in the sector, providing a modest lift to the USD and exerting pressure on the Gold during the Asian session on Thursday.
• Meanwhile, Iran and the US remain at odds over the latter's demand that negotiations cover Tehran's missile arsenal and Iran's insistence on discussing only its nuclear program. This could further act as a tailwind for the safe-haven commodity.
• Analysts at UBS in a recent note rated gold as an attractive hedge and suggested that the bull market is not yet over, projecting that prices can rise to $6,200 an ounce (oz) by mid-2026, up nearly 25% from the current levels.
• Traders now look to Thursday's US economic docket, featuring the release of the delayed JOLTS Job Openings data and the usual Weekly Initial Jobless Claims. This, along with Fed speak, could influence the buck and the XAU/USD pair.

Gold shows some resilience below $4,800; not out of the woods yet

The overnight failure ahead of the $5,100 mark and the subsequent downfall back the case for a further near-term depreciating move for the Gold. The Moving Average Convergence Divergence (MACD) line stands above the Signal line and above zero, while a contracting positive histogram suggests momentum is cooling. The Relative Strength Index (RSI) prints at 46, neutral and below its midline.

However, the 200-period Simple Moving Average (SMA) rises to $4,677.91, with the Gold price holding above it and retaining an upside bias. Measured from the $5,597.45 high to the $4,390.81 low, the 50% retracement level at $4,994.13 acts as initial resistance, and a breakout could target the 61.8% Fibonacci retracement at $5,136.51. A close above the said hurdle would strengthen the bullish tone and open the way for further recovery.

Near-term traction is mixed as MACD’s positive bias eases and RSI remains sub-50, keeping price action contained below nearby resistance. Failure to clear $4,994.13 would keep the range intact, while dips would be cushioned by the rising 200-period SMA around $4,677.91.

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