Gold eases from record high; bullish bias remains amid risk-off mood and weaker USD
- Gold gains strong positive traction as Trump’s fresh tariff threats boost safe-haven demand.
- Heightened geopolitical risks and the emergence of some USD selling also benefit the bullion.
- Reduced bets for two more Fed rate cuts in 2026 could act as a headwind for the yellow metal.
Gold (XAU/USD) trims a part of its intraday gains to the $4,700 neighborhood, or a fresh all-time peak, though any meaningful corrective decline seems elusive amid a supportive fundamental backdrop. US President Donald Trump threatened to impose new tariffs on eight European countries that opposed his plan to acquire Greenland. The announcement drew sharp criticism from European officials and raised concerns about a broader transatlantic trade dispute. This, along with heightened geopolitical risk, triggers a fresh wave of the global risk-aversion trade, prompting investors to seek refuge in traditional safe-haven assets and underpinning the precious metal.
Meanwhile, trade war fears trigger a crisis of confidence in US assets and drag the US Dollar (USD) away from its highest level since December 9, touched last week. This turns out to be another factor offering additional support to the Gold price. However, reduced bets for two more rate cuts by the US Federal Reserve (Fed) in 2026 hold back the USD bears from placing aggressive bets and act as a headwind for the non-yielding yellow metal. Investors also seem reluctant and opt to wait for more cues about the Fed's rate-cut path. Hence, the focus will be on the release of the US Personal Consumption Expenditure (PCE) Price Index and the final US Q3 GDP on Thursday.
Daily Digest Market Movers: Gold might continue to benefit from flight to safety and USD weakness
- US President Donald Trump vowed on Saturday that he would impose an additional 10% tariffs on goods from eight European nations starting February 1, until the US is allowed to buy Greenland. Trump added that the rate is set to rise to 25% in June if no agreement is reached.
- Major European Union states condemned the tariff threats over Greenland as blackmail, with France proposing to respond with a range of previously untested economic countermeasures. This reignites trade-war fears, pushing the safe-haven Gold to a fresh record high on Monday.
- Amid rising tensions with the US, Iran issued a fresh warning that any attack on Supreme Leader Ayatollah Ali Khamenei could spark an all-out war. Adding to this, the intensifying Russia-Ukraine conflict keeps geopolitical risks in play and further benefits the safe-haven commodity.
- Ukraine’s foreign minister Andrii Sybiha said that there was evidence Russia was considering attacks on key sites linked to nuclear power stations. President Volodymyr Zelensky added that Russian strikes demonstrated that they were not interested in diplomacy or ending the war.
- Trump said that he would prefer to keep National Economic Council director Kevin Hassett in his current role, suggesting that someone else will be tapped to succeed Federal Reserve Chair Jerome Powell. This forced investors to trim their bets for more aggressive easing by the Fed.
- The US Dollar, however, struggles to benefit from a shift in the likelihood of Fed rate cuts in 2026 and retreats sharply from its highest level since December 9, touched last week. This turns out to be another factor that contributes to the precious metal's strong intraday move higher.
- Traders now look forward to the release of the US Personal Consumption Expenditure (PCE) Price Index and the final US Q3 GDP print for a fresh impetus on Thursday. The fundamental backdrop, however, seems tilted in favor of the XAU/USD bulls and backs the case for further gains.
Gold eases from ascending channel resistance, just ahead of $4,700
The bullion has been scaling higher from the late October low along an ascending channel, which points to a well-established short-term uptrend. The Moving Average Convergence Divergence (MACD) holds above the zero line and has improved over recent sessions, suggesting strengthening bullish momentum. The Relative Strength Index at 69.96 sits near overbought, which caps the Gold near the ascending channel resistance.
A rejection at the upper band would shift focus to support at $4,406.94, where the channel structure would be expected to attract bids. A sustained close above resistance would extend the advance, while a pullback would keep the consolidation phase within the channel in play and delay fresh trend extension.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.22% | -0.06% | -0.20% | -0.18% | -0.39% | -0.49% | |
| EUR | 0.24% | 0.02% | 0.18% | 0.04% | 0.07% | -0.15% | -0.25% | |
| GBP | 0.22% | -0.02% | 0.19% | 0.03% | 0.05% | -0.17% | -0.27% | |
| JPY | 0.06% | -0.18% | -0.19% | -0.16% | -0.14% | -0.35% | -0.45% | |
| CAD | 0.20% | -0.04% | -0.03% | 0.16% | 0.03% | -0.19% | -0.30% | |
| AUD | 0.18% | -0.07% | -0.05% | 0.14% | -0.03% | -0.22% | -0.33% | |
| NZD | 0.39% | 0.15% | 0.17% | 0.35% | 0.19% | 0.22% | -0.11% | |
| CHF | 0.49% | 0.25% | 0.27% | 0.45% | 0.30% | 0.33% | 0.11% |
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.
