Gold holds firm but lacks follow-through ahead of key US economic releases

• Gold holds above the $5,000 handle but lacks follow-through amid calm market conditions.
• Traders remain cautious after the recent sharp correction, with attention turning to US Retail Sales, NFP and CPI for fresh direction.
• Technically, a sustained break above the $5,050-$5,100 area is needed to revive upside momentum.

Gold (XAU/USD) struggles for direction on Tuesday, with overall trading activity subdued in the absence of fresh market-moving catalysts. At the time of writing, XAU/USD trades around $5,050, holding firm after briefly slipping below the $5,000 psychological level during the early Asian session.

A risk-on mood, with global equities extending their rally, is also weighing on the Bullion in the near term. At the same time, a broadly weaker US Dollar (USD) and softer US Treasury yields are helping to cushion the downside, keeping losses limited.

Bulls are showing little appetite to add fresh long positions, as elevated volatility across the precious metals space continues to discourage aggressive positioning. The caution follows a sharp correction of around 21% from the late-January record highs near $5,600, with Gold still trading almost 10% below its peak.

Looking ahead, upcoming US economic releases this week could provide fresh direction for Bullion, with Retail Sales due later on Tuesday, followed by Nonfarm Payrolls (NFP) on Wednesday and the Consumer Price Index (CPI) on Friday.

Market movers: Debasement trade, geopolitics and Fed easing bets keep Gold supported

• The broader uptrend in Gold remains intact, as supportive macro and structural factors continue to underpin demand. The debasement theme remains a key pillar behind Gold’s rally, with central banks increasingly turning to the metal as a hedge as confidence in the US economy fades amid rising government debt and concerns over President Donald Trump’s trade rhetoric, along with interference with the Federal Reserve’s (Fed) independence.
• China has urged domestic banks to curb their exposure to US Treasuries on market-risk concerns, Bloomberg News reported on Monday. In response, US Treasury yields remain under pressure across the curve, with the benchmark 10-year yield extending its decline for a second straight day and hovering near 4.18%.
• Meanwhile, the US Dollar Index (DXY), which tracks the Greenback against a basket of major currencies, is trading broadly flat around 96.90, after slipping to a more than one-week low on Monday.
• Dovish Fed expectations remain supportive for Gold, as lower borrowing costs reduce the opportunity cost of holding the non-yielding metal. Markets are currently pricing in nearly 50 basis points of rate cuts this year, with the upcoming NFP and CPI releases likely to be crucial in determining the timing and path for the Fed to resume its easing cycle.
• White House Senior Adviser Kevin Hassett said on Monday that “we should expect slightly lower jobs numbers,” adding that “lower jobs numbers shouldn’t trigger panic.” Economists expect the US economy to add 70K jobs in January, following a 50K increase in December.
• Tensions between the US and Iran remain elevated as both sides work to set up the next round of talks. The US Maritime Administration warned US ships to stay “as far as possible” when navigating the Strait of Hormuz after a vessel was harassed last week, Bloomberg reported.

Technical analysis:

From a technical perspective, short-term indicators remain consistent with the current range-bound price action. On the 4-hour chart, the 50-period Simple Moving Average (SMA) is in the early stages of crossing below the 100-period SMA, with the shorter average starting to roll over while the longer one continues to edge higher, signaling mixed alignment.

At the same time, price is still holding above both moving averages, which keeps a modest upside bias in place. Momentum indicators also point to consolidation rather than a breakout.

The RSI is holding above the mid-line near 57, suggesting mild positive momentum, but without strong bullish conviction. Meanwhile, the ADX remains depressed near 13.5, confirming the lack of a clear trend.

On the upside, a clear and sustained break above the $5,050-$5,100 resistance zone would be needed to revive upside momentum and open the door for a resumption of the broader uptrend.

On the downside, a decisive move back below the $5,000 psychological level would weaken the near-term structure and shift the short-term bias back to the downside.