Gold News: Gold Rally Cools After Record High—Profit-Taking Meets Geopolitics

Profit-Taking Emerges After 7.4% Year-to-Date Rally

Spot gold is lower on Friday with some traders lightening positions after starting the year with a 7.4% rally. While safe-haven demand and expectations of Fed rate cuts had been supporting the market throughout 2025, this year’s surge was sparked by unexpected geopolitical events in Iran that even had President Trump threatening to take military action.

At 14:32 GMT, XAUUSD is trading $4600.05, down $15.99 or -0.35%.

Record High at $4642.97 Caps Momentum as Iran Fears Ease

Upside momentum slowed on Wednesday at the record high of $4642.97, however, with Trump dampening expectations of an attack on Iran. Nonetheless, the market remains well supported by rate cut hopes and safe-haven buying.

Strategic Crossroads: Buy Strength or Wait for Value?

Prices may have rallied too far, too fast, giving buyers an excuse to book some profits. Now, the decision process comes down to two strategies: buy strength through the record high, or buy a dip into value levels. Ultimately, it’s a personal preference, but I’ve noticed that while slow and steady is the preference for long-term bulls, headline traders are driving the short-term rally and volatility. I don’t expect this pattern to change as long as the trend is up.

Economic Data Supports Fed Rate Cut Expectations for 2026

Economic data is also playing a role in this week’s activity. Gold bulls were handed permission to rally on Tuesday when U.S. consumer inflation data affirmed one or two rate cuts this year. Although a rate cut in January is not likely, traders have priced in at least two between March and December 2026. On Thursday, stronger than expected initial claims data dampened expectations of an early rate cut, but the news wasn’t strong enough to take all cuts off the table.

Geopolitical Tensions Remain Supportive but Not at Current Levels

Given the friction in Iran has only softened rather than disappeared entirely, the geopolitical backdrop remains supportive—just not at current elevated price levels, suggesting traders may be waiting for a pullback before re-entering.

Technical Picture: Uptrend Intact with Key Levels in Focus

Technically, the main trend is up according to the daily swing chart. A trade through $4642.97 will signal a resumption of the uptrend. The minor trend changes to down if $4407.83 fails. The main trend changes to down under $4274.02.

The 50-day moving average at $4287.02 is also a valid trend indicator and support level.

The current rally to $4642.97 started on October 28 at $3886.46, making its 50% level at $4264.71 another target price. This forms a support cluster with the main bottom at $4274.02 and the 50-day moving average at $4287.02.

From the short-term viewpoint, 50% levels at $4525.40 and $4458.49 are the first target areas that could attract buyers.

Short-Term Outlook: Iran Uncertainty to Drive Friday’s Close

Prices may hold firm into the close today because of concerns of another escalation of events in Iran. A new wave of buying could challenge the record high at $4642.97. If traders believe the threat has been diminished then profit-taking could pressure the market into $4525.40 to $4458.49.

More Information in our Economic Calendar.