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Gold Eyes Acceptance Above $5,000 as Crucial Week Begins
Gold prices are consolidating recent gains around the $5,000 level, with buyers becoming increasingly active as a pivotal trading week gets underway. The bullish tone reflects growing expectations for a sustained upward trend, while market attention remains firmly focused on delayed US Nonfarm Payrolls (NFP) data and the Consumer Price Index (CPI), scheduled for release on Wednesday and Friday, respectively.
XAU/USD Technical Outlook
On the daily chart, XAU/USD is trading at $5,023.88, firmly supported by a strong bullish technical structure. The 21-day Simple Moving Average (SMA) has moved above the 50-, 100-, and 200-day SMAs, with all averages sloping higher—confirming a well-established uptrend. Price action remains comfortably above these indicators, keeping buyers in control.
The Relative Strength Index (RSI) stands at 57.72, above the neutral 50 level and well below overbought territory, signaling steady and healthy bullish momentum. Immediate dynamic support aligns with the 21-day SMA at $4,873.06.
This bullish alignment suggests that any pullbacks are likely to remain contained as long as prices hold above the short-term moving average. A daily close below this level could trigger a deeper retracement toward the 50-day SMA near $4,563.97. Meanwhile, rising medium- and long-term SMAs continue to reinforce a buy-on-dips strategy and keep the broader trend tilted firmly to the upside.
Fundamental Overview
Ahead of a high-impact week, dovish sentiment surrounding the US Federal Reserve is setting the tone amid a renewed reflation trade, allowing gold to maintain its solid rebound from near the $4,650 region seen on Friday.
Following weaker-than-expected US labor market data released last week, markets continue to price in the first Federal Reserve rate cut of the year as early as June. However, investor sentiment remains mixed regarding the future policy stance under potential Fed Chair nominee Kevin Warsh.
Elsewhere, risk appetite has been buoyed by Japan’s snap election, where the Liberal Democratic Party (LDP) secured a strong majority. The outcome reinforced expectations for debt-driven fiscal stimulus, supporting reflationary trades across global markets.
Additionally, renewed weakness in the USD/JPY pair—following intensified verbal intervention from Japanese authorities—has weighed on the US Dollar, providing further support for gold prices.
That said, gold bulls continue to face headwinds as broader risk sentiment improves on expectations of expansionary fiscal policy in Japan. Japanese equity markets surged to record highs, lifting Asian stocks overall and limiting upside momentum for safe-haven assets.
Looking ahead, it remains to be seen whether gold can extend its recovery, as traders may turn cautious and reposition ahead of the January US employment report due on Wednesday.