Xelans
January 12, 2026Gold continues to attract buyers for the third consecutive day as increasing geopolitical risks enhance demand for safe-haven assets.
Concerns regarding the independence of the Federal Reserve negatively impact the USD, thereby benefiting the XAU/USD pair.
Diminished expectations for further rate cuts by the Fed may limit the commodity's potential ahead of crucial US inflation data.
Gold maintains a bullish outlook near its all-time high amidst geopolitical tensions and concerns regarding the Fed's policies.
Gold (XAU/USD) upholds its bullish sentiment as it approaches the European trading session, currently priced below the $4,600 mark, which represents a new all-time high reached earlier this Monday. The US military involvement in Venezuela, President Donald Trump's threats of military intervention in response to the unrest in Iran, the ongoing Russia-Ukraine conflict, tensions between China and Japan, and the White House's persistent interest in acquiring Greenland are keeping investors anxious. This situation adversely affects global risk sentiment and continues to reinforce the precious metal's status as a safe haven.
At the same time, worries about the independence of the US Federal Reserve are pulling the US Dollar (USD) down from its peak level since December 5, which was reached on Friday, and are contributing to a shift in flows towards non-yielding Gold. However, the US jobs data released on Friday has moderated expectations for aggressive easing by the Fed in 2026, which may limit the upside potential for the precious metal. Traders appear hesitant to make new bullish investments in the XAU/USD pair and may choose to remain on the sidelines ahead of the US inflation figures scheduled for release this week.
Daily Digest Market Movers: Gold continues to be bolstered by safe-haven demand and a weaker USD
In light of a strike in Venezuela earlier this month, US President Donald Trump announced that Washington would temporarily assume control of Venezuela’s administration to facilitate a transition. Additionally, Trump referred to himself as the acting President of Venezuela in a post on Truth Social.
According to the WSJ, which cited unnamed US officials, Trump is contemplating reprimanding Iran due to its crackdown on mass anti-government protests, which have resulted in over 500 fatalities. This situation, coupled with the escalating Russia-Ukraine conflict, maintains geopolitical risks at the forefront.
Indeed, a Ukrainian drone strike caused a fire at an oil depot in Russia’s southern Volgograd region on Saturday. Conversely, Russia employed its hypersonic Oreshnik intermediate-range ballistic missile in an overnight attack on the Lviv region, which is near the EU and NATO borders.
In a separate development, China has intensified its dispute with Japan by imposing restrictions on the export of rare earths and rare-earth magnets to Japan. This ban follows recent comments made by Japan’s Prime Minister regarding Taiwan. Consequently, safe-haven Gold has reached a new all-time high during the Asian trading session on Monday.
Meanwhile, US Federal Reserve Chair Jerome Powell stated that the potential for criminal indictment against him arises from the central bank's decision to set interest rates based on the best assessment of public service, rather than adhering to the President's preferences.
Powell further noted that the outcome of the investigation will influence the future decisions of the central bank. Following the US jobs report released on Friday, which indicated a decrease in the Unemployment rate from 4.6% in December to 4.4%, traders have reduced their expectations for additional interest rate cuts this year.
Additionally, the headline NFP revealed that the economy added 50K jobs last month, falling short of market expectations for a figure of 60K and November's revised total of 56K (originally reported as 64K). This data does little to bolster the USD bulls amid growing concerns about the US economy.
