Gold Price Forecast: XAU/USD reaches levels near $4,900 on risk aversion
- Gold rallies on risk aversion and reaches fresh record highs just below $4,900.
- Demand for safe havens remains high, ahead of Trump's speech at Davos.
- Technical indicators, at heavily overbought levels, hint at some correction.
Gold (XAU/USD) remains unstoppable, underpinned by a sour market sentiment on the back of escalating tensions between the US and the EU and a broader de-dollarisation process. The precious metal has rallied more than 2% on the day and nearly 5% so far this week to change hands at $4,860 at the time of writing.
Demand for safe havens like Gold remains strong on Wednesday, as investors hold their breath ahead of US President Trump’s speech at the Davos World Economic Forum, due later on Wednesday.
The US President has rattled markets this week with his obsession with taking control of Greenland and the threat of additional tariffs on countries opposing his plans. These actions have revived the “Sell America” trade seen after April’s “Liberation Day,” sending the US Dollar Index (DXY) on a tailspin.
Technical analysis: Technical indicators signal an overstretched rally
XAU/USD trades at $4,864, with the 100-period Simple Moving Average (SMA) ascending to the 4,520.74 area, reinforcing a bullish underpinning. Technical indicators are showing sharply overbought levels, but the precious metal refuses to pull back, underpinned by the fundamental scenario.
The Moving Average Convergence Divergence (MACD) line stands well above the Signal line and above zero, with the histogram expanding positively, suggesting strengthening bullish momentum. The Relative Strength Index (RSI), near 85, is heavily overbought, at levels usually anticipating a correction or, at least, some consolidation.
Bulls have been capped at $4,888 earlier on Friday, right below the psychological $4,900 level. Further up, the 265.8% Fibonacci extension of the January 8 to 15 rally, at $4,991, and the $5,000 round level seem a plausible target. On the downside, the January 16 high, at $4,690, and the January 13 and 15 lows, in the area of $4,575, might provide support to a bearish correction.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.15% | -0.45% | 0.09% | -0.68% | -1.26% | -1.92% | -1.33% | |
| EUR | 1.15% | 0.70% | 1.22% | 0.48% | -0.13% | -0.79% | -0.19% | |
| GBP | 0.45% | -0.70% | 0.28% | -0.22% | -0.82% | -1.48% | -0.88% | |
| JPY | -0.09% | -1.22% | -0.28% | -0.73% | -1.32% | -1.96% | -1.38% | |
| CAD | 0.68% | -0.48% | 0.22% | 0.73% | -0.57% | -1.24% | -0.66% | |
| AUD | 1.26% | 0.13% | 0.82% | 1.32% | 0.57% | -0.66% | -0.07% | |
| NZD | 1.92% | 0.79% | 1.48% | 1.96% | 1.24% | 0.66% | 0.60% | |
| CHF | 1.33% | 0.19% | 0.88% | 1.38% | 0.66% | 0.07% | -0.60% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).