Gold extends record-setting rally for sixth straight day amid safe-haven flows, weak USD
- Gold buying remains unabated for the sixth straight day amid sustained safe-haven demand.
- The ‘Sell America’ trade weighs heavily on the USD and further benefits the XAU/USD pair.
- Dovish Fed expectations contribute to the move higher ahead of the FOMC policy meeting.
Gold (XAU/USD) builds on last week's blowout rally and gains strong follow-through positive traction for the sixth straight day, scaling a new all-time peak during the Asian session on Monday. The commodity is nearing the $5,100 mark as investors continue to take refuge in traditional safe-haven assets amid persistent geopolitical and trade-related uncertainties. Moreover, prospects for further policy easing by the US Federal Reserve (Fed), sustained buying by central banks, and record inflows into exchange-traded funds remain supportive of the relentless rally.
Meanwhile, investors have been moving money out of US assets on the back of heightened economic and policy risk linked to US President Donald Trump's tariff threats. Adding to this, the US government’s attack on the Fed's independence and concerns over government debt levels drag the US Dollar (USD) to its lowest level since September 2025, further lending support to the Gold. Traders now look to the outcome of a two-day FOMC meeting on Wednesday for cues about the Fed's rate-cut path, which will drive the USD and the non-yielding yellow metal.
Daily Digest Market Movers: Gold continues to be underpinned by global flight to safety, bearish USD
- The recent short-lived escalation of friction between the United States and NATO over Greenland raised some doubts about trust in the alliance. Moreover, Ukraine and Russia ended a second day of US-brokered talks in Abu Dhabi on Saturday without a deal.
- Adding to this, US President Donald Trump said on Saturday he would impose a 100% tariff on Canada if it follows through on a trade deal with China. This continues to lift the safe-haven Gold to new all-time highs for the sixth consecutive day on Monday.
- This comes on top of the broader de-dollarization trend and bets that the US Federal Reserve would cut interest rates two more times in 2026, which drags the US Dollar to a four-month low and turns out to be another factor that benefits the precious metal.
- China's central bank extended its gold-buying spree for a fourteenth month in December. Moreover, emerging market central banks – the National Bank of Poland, Reserve Bank of India, and Central Bank of Brazil – were active buyers through early 2026.
- Furthermore, global demand for investments in gold through exchange-traded funds increased by 25% in 2025. In fact, gold holdings increased to 4,025.4 tonnes from 3224.2 tonnes in 2024, and the total Assets Under Management in ETFs stood at $558.9 billion.
- The 'Sell America' sentiment gained momentum in recent weeks due to the Greenland tariff dispute, the US government’s attack on the Federal Reserve's independence, and enduring concerns over government debt levels. This further underpins the commodity.
- The market focus now shifts to the highly anticipated two-day FOMC meeting, starting on Tuesday. The Fed is scheduled to announce its decision on Wednesday, though the focus will be on the accompanying statement and the post-meeting press conference.
- Fed Chair Jerome Powell's comments will be scrutinized for cues about the future policy path, which would drive the USD and the non-yielding yellow metal. In the meantime, US Durable Goods Orders could produce short-term opportunities on Monday.
Gold bulls pause for a breather near the ascending channel hurdle, around the $5,100 mark
The ascending channel from $4,464.07 underpins the uptrend, with resistance near $5,099.04. The XAU/USD pair hovers close to the upper boundary, where rallies tend to stall. A clear breakout could extend the climb, while a rejection at this barrier would keep the advance capped within the channel.
The Moving Average Convergence Divergence (MACD) line holds above the Signal line and above zero, and the positive histogram is expanding, suggesting strengthening bullish momentum. The RSI stands at 80.76, indicating stretched conditions that could precede a pause. Should momentum cool, support aligns with the channel floor near $4,932.75. Holding that base would preserve the bullish structure, whereas a decisive break lower would signal a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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