Gold traded near $5,050 on Tuesday after bouncing back from a dip below $5,000. Still, buying interest in Europe was light. Lower political risk after Japan’s snap election on Sunday, plus easing tensions in the Middle East, lifted risk appetite and reduced demand for gold.
Markets now expect at least two 25-basis-point US rate cuts in 2026. Traders also expect two cuts this year, with the first in June. At the same time, worries about the Federal Reserve’s independence kept the US dollar near its lowest level in more than a week. That supported gold, which does not pay interest.
Indirect US–Iran talks ended on Friday after eight hours, with both sides agreeing to keep diplomacy open. Investors are now watching key US data: Retail Sales on Tuesday, Nonfarm Payrolls on Wednesday, and US inflation on Friday.
China’s central bank bought gold for the 15th straight month in January. Technical indicators stayed mildly positive, but momentum is fading. The MACD histogram is still positive but smaller, and the RSI is near 55. Support sits at an uptrend line from $4,397.52, with another level near $4,819.19. Resistance is seen around $5,100.
Gold is holding around $5,050 and is being pulled in two directions. On one side, expected Fed rate cuts and political pressure on the central bank are weakening the US dollar, which supports gold. On the other side, lower geopolitical risks in the Middle East and Japan are reducing safe-haven demand.
This week’s main drivers are the US jobs report and inflation data, which may shape the Fed’s next step. Strong job growth in 2024 delayed rate cuts until late 2025. If Wednesday’s payrolls or Friday’s inflation come in weaker than expected, it would strengthen the case for a June cut and could lift gold.
Because the market is waiting for these releases, price swings may increase. That could create opportunities for options traders who use strategies designed for a breakout in either direction. Futures traders may want to avoid taking large positions ahead of the data, since a clear catalyst is still missing.
In the background, continued central bank buying is helping set a firm floor under prices. The World Gold Council reported record central bank purchases in 2024, and the trend continued through 2025 and into this year. This suggests a longer-term move away from US Treasuries. If upcoming data supports gold, a clean break above $5,100 could lead to a fast move higher.
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