Gold Nears $5,300: Dollar Crashes, Markets Wary of Fed, Bullish Trend Looks "Strong"
Global gold prices (XAU/USD) continued their extreme rally and set a new record in today's trading. Spot gold broke through $5,200 and briefly touched an intraday peak of around $5,285/oz, while on several platforms, prices were seen testing the $5,290 zone as volatility increased ahead of the Fed's decision.
The main catalyst came from the fall in the US dollar, which briefly hit a nearly four-year low, making gold increasingly attractive to global buyers as it became relatively "cheaper" in other currencies. Reuters also noted that this gold rally occurred amid a combination of economic uncertainty and geopolitical risks that kept safe-haven demand high.
In terms of domestic US sentiment, pressure increased after US consumer confidence reportedly fell to its lowest level in more than 11 years, adding to market concerns about economic momentum. At the same time, the market was also sensitive to issues surrounding the Fed's policy direction and perceptions of its independence—which led investors to seek refuge in safe-haven assets like gold.
Technically, the gold trend remains in a sharply bullish structure (a series of higher highs and higher lows). The rapid surge from the $5,100 area to the $5,280s indicates strong buyer dominance, but also increases the risk of a two-way movement (whipsaw) as the market has become overheated. Several daily technical indicators from major data providers place gold in a Strong Buy position with aggressive momentum signals.
Ahead of the next direction, the market's primary focus is on the FOMC meeting on January 27-28, with the statement released at 2:00 PM ET and the press conference at 2:30 PM ET today. If the Fed's message sounds more dovish (or the dollar weakens again), gold could continue testing the psychological 5,300 zone. However, if there is a hawkish surprise and the dollar rebounds, a rapid correction remains highly likely given the very steep rally in recent sessions.
Looking ahead, a number of global institutions believe the gold rally could remain "sticky" as long as demand for real assets persists—some even project gold could approach $6,000 by 2026 under a scenario of sustained demand from investors and central banks. However, in the short term, the market believes gold's direction will be largely determined by the dollar's response and the Fed's tone tonight: continue accelerating if the dollar weakens, or take a breather if the dollar rebounds.
Source: Newsmaker.id
