Gold (XAUUSD) Price Forecast: Fundamentals Supportive as Bullish Tone Builds Over $4436.38 to $4405.38

Short-Term Retracement Zone Becomes New Support at $4405-$4436

Spot Gold (XAUUSD) is higher on Tuesday after crossing to the strong side of the short-term retracement zone at $4436.38 to $4405.38. This area is now new support.

A sustained move over $4436.38 will indicate the buying is getting stronger. This could create the upside momentum needed to challenge the record high at $4536.74.

On the downside, if $4405.38 fails as support then look for the selling to possibly extend into the swing bottom at $4274.02. Although the trend will turn down on the two-day swing chart, buyers are likely to come in to defend the 50% level at $4211.60 and the 50-day moving average at $4193.30.

To put it another way, as long as the 50-day MA support remains intact, the market will remain in “buy the dip” mode.

At 13:10 GMT, XAUUSD is trading $4464.61, up $15.44 or +0.35%.

Venezuela Crisis and Trump’s Geopolitical Warnings Fuel Safe-Haven Demand

Gold is currently sitting at a one-week high, edging closer to the record. Most headlines are telling us that safe-haven buying is behind the strength. The source of this activity is geopolitical tensions over the arrest and capture of Venezuela’s President Nicolás Maduro over the weekend. The move approved by U.S. President Donald Trump is sending fear throughout the global community since he also mentioned Greenland, Colombia, and Mexico in recent press conferences.

Weak Manufacturing Data Raises Fed Rate Cut Expectations

Softer-than-expected U.S. economic data is also helping to underpin the market. On Monday, a report showed U.S. manufacturing activity contracted more than expected in December, falling to a 14-month low. This news helped raise the odds of additional rate cuts by the Federal Reserve.

NFP Report Could Determine Fed’s 2026 Rate Path

Gold bulls could also be betting on weak labor market data in Friday’s U.S. Non-Farm Payrolls report. The Fed said at its December rate-cutting meeting that it was projecting just one cut in 2026. However, investors are currently pricing in two this year and they are hoping Friday’s labor market data supports this notion.

Minneapolis Fed President Neel Kashkari on Monday warned of the risk that the jobless rate could “pop” higher, increasing the likelihood of a rate cut, Reuters reported.

Iran Unrest Adds Second Geopolitical Risk Premium to Gold Rally

In addition to Venezuela and the NFP report, traders are also monitoring the events in Iran, where widespread unrest, fueled by a lingering economic crisis, has prompted President Trump to issue intervention warnings.

In a social media post last Friday, Trump vowed the U.S. was “locked and loaded and ready to go” if Iranian authorities used violence against peaceful demonstrations, according to Reuters.

Gold Emerges as Hedge Against Potential Stock Market Correction

There is also some chatter today that gold is being used as a hedge against a possible stock market correction.

The Verdict: Momentum Strategy Prevails as Long as Support Holds

Looking ahead, look for a strong upside bias as long as the retracement zone at $4436.38 to $4405.38 holds as support. Right now, buyers are chasing momentum and taking out offers. If support fails, they’ll switch their strategy to buying value.

More Information in our Economic Calendar.