Tensions Rise, Gold Remains Solid Near All-Time High
Gold (XAU/USD) began to "catch a breather" on Tuesday after a strong rally that sent the price to a new record high at 5,111 on Monday. Despite a slight correction, gold remained on a safe path as safe haven flows haven't completely subsided—the market remains wary of unsettled geopolitics and lingering economic uncertainty.
In early trading, XAU/USD was hovering around 5,088. The price has indeed fallen from its peak, but the decline still appears "neat"—there are no signs that buyers are leaving the market. As long as gold remains above the key psychological area, the defensive narrative remains in control.
The main fuel continues to come from the trade war issue. US President Donald Trump's tariff agenda has again made the market nervous. Aggressive rhetoric and the repeated use of tariffs as an "economic weapon" have put pressure on the dollar, and such conditions are usually fertile ground for gold.
Meanwhile, Wall Street may still appear resilient, but the market is not completely calm. Concerns about overpriced valuations continue to keep investors easily alarmed. Furthermore, the US government shutdown is looming again, as the January 30th funding deadline approaches—a combination that has kept the defensive flow into bullion going.
Even so, gold hasn't received any truly strong additional support today. Many traders are choosing to reduce their aggressiveness and hold positions, as the market awaits the next big moment: the Fed's interest rate decision on Wednesday.
Essentially, gold still has the upper hand in sentiment, but its room to move is likely cautious. As long as the Fed hasn't spoken, the market is opting for observation mode: maintaining safe positions while preparing to react if the policy direction and tone of the statement deviate from expectations. (alg)
Source: Newsmaker.id
