Gold prices have eased from recent record highs of $4,967 but remain above the prior peak of $4,888. The reduction in the US Dollar’s strength continues to lend support to gold prices.
Currently trading at $4,915, gold is experiencing a pause in its ascent after a 4-day rally that set a new all-time high. The precious metal maintains its bullish stance and is on track for a 6.5% gain over the week.
Us Dollar Depreciation And Global Trade Tensions
The depreciation of the US Dollar is partly due to the strained US-EU relations following the Greenland dispute. Although efforts were made to mend ties at the Davos Forum, achieving full restoration of confidence remains challenging.
Technical analysis indicates that gold is comfortably above previous highs, specifically the $4,880 range. Despite a mild contraction, indicators like MACD and RSI suggest continued bullish momentum.
Momentum was halted at the 127.2% Fibonacci expansion at $4,970, with $5,000 positioned as a psychological ceiling. Support is evident at the previous record high of $4,888 and the January 21 low of $4,775.
The US Dollar’s strongest performance against currencies this week was seen against the Japanese Yen.
Gold Bullish Sentiment And Strategic Options
We see the underlying trend for gold as firmly bullish, driven primarily by sustained weakness in the US Dollar. The latest data from the World Gold Council confirmed this sentiment, showing central bank buying reached a new quarterly record in Q4 2025. This fundamental backdrop suggests the path of least resistance remains upward.
However, with the Relative Strength Index pulling back from overbought territory, chasing the market at these record highs is risky. We saw a similar pattern in the run-up to $4,500 back in October 2025, where a brief consolidation preceded the next major leg higher. This suggests that selling cash-secured puts with strike prices near the $4,775 support level could be a prudent way to collect premium while waiting for a better entry point.
For those looking for leveraged upside, long-dated call options with strike prices above the psychological $5,000 mark appear attractive for the coming months. Given that December 2025’s CPI data came in at an annualized 4.1%, well above the Fed’s target, inflationary pressures should continue to support gold’s appeal as a store of value. Using bull call spreads could also be an effective strategy to reduce the initial cost while targeting a move toward new highs.
The primary driver remains the “Sell America” trade, which has only intensified after diplomatic talks in Brussels failed to resolve the ongoing trade dispute last week. This geopolitical uncertainty makes it difficult for the Federal Reserve to consider a hawkish policy pivot, further pressuring the dollar. We’ve noted that net outflows from U.S. equity funds have now reached over $50 billion year-to-date in 2026, with a significant portion flowing into gold-backed ETFs.
