Gold prices are in a correction phase after surpassing the all-time high of $4,600... A dual game of geopolitical tensions and dollar weakness

Gold’s “Surrender” Signal?

On Monday, in the Asian markets, gold surged to near an all-time high of $4,600 before pulling back slightly. However, buying momentum has continued for three consecutive trading days. The reason investors flock to gold is simple: geopolitical instability has surged due to the Venezuelan political crisis, Iran’s large-scale protests and suppression, the prolonged Russia-Ukraine war, China’s containment of Japan, Greenland issues, and more.

At the same time, debates over the Fed’s independence have put pressure on the dollar, increasing the attractiveness of gold as an investment. Safe-haven demand persists, but further gains have been hindered.

Indicators mixed with signs of a weakening trend

The US employment data released on Friday dampened the market’s expectation of aggressive rate cuts in 2026, causing a retreat in chasing buying sentiment.

Specifically:

• Unemployment rate improved from 4.6% in November to 4.4% in December(
• Non-farm payrolls (NFP) added 50,000 jobs) versus market expectations of 60,000, and the revised November figure was 56,000, below expectations(

This indicates that the market is shifting towards a cautious stance, focusing more on this week’s US inflation indicators rather than expanding its immediate directional outlook.

) Chain reaction of geopolitical risk expansion

Venezuelan political situation President Donald Trump mentioned the possibility of temporary US administrative intervention and even referred to himself as the “interim president of Venezuela.”

Iran tensions According to WSJ reports, the US government is reviewing responses to the suppression of large-scale anti-government protests in Iran, with over 500 deaths(.

Military escalation in the Russia-Ukraine war Ukrainian drones struck oil storage facilities in the Volgograd region, and Russia attacked Lviv with hypersonic Orekhnik medium-range ballistic missiles.

East Asian tensions China restricted exports of rare earths and rare earth magnets following Japan’s statements related to Taiwan, intensifying trade conflicts.

) Fed politicization debate

Fed Chair Jerome Powell defended himself against threats of criminal prosecution, stating it was “a result of decisions made based on public interest,” but expressed concern that future investigations could influence the Fed’s decision-making. This has amplified market anxiety over the potential erosion of Fed independence.

Technical perspective: overheating signals vs. strength of the upward trend

Recent movements in gold prices are progressing within an upward channel, indicating a clear short-term bullish trend.

Positive signals:

• Price is above the rising 200-period SMA
• The $4,325–$4,320 range may serve as a dynamic support level
• MACD remains above the signal line in positive territory, with expanding histogram, indicating strengthening bullish momentum

Caution signals:

• RSI at 71.82 indicates overbought conditions
• Near the highs, correction or consolidation is likely

If a correction occurs, around $4,365 will be the first support level. Maintaining this support keeps the upward trend intact. Conversely, a clear breakout above the channel’s upper resistance could reopen the path for further gains.

( Weekly focus points

This week, US economic indicators, especially inflation data, will be key. The statements from FOMC officials are likely to determine the next direction of gold and the dollar.