Gold traded near $5,050 on Tuesday after recovering from a fall below $5,000, but buying remained limited in Europe. Reduced political uncertainty after Japan’s snap election on Sunday and easing Middle East tensions supported risk appetite and weighed on demand for gold.
Markets are pricing at least two 25-basis-point US rate cuts in 2026, while expectations also point to two cuts this year with the first in June. Concerns about the Federal Reserve’s independence kept the US dollar near its lowest level in more than a week, which supported non-yielding gold.
US–Iran indirect talks ended on Friday with an agreement to keep a diplomatic route, after eight hours of meetings. Further US data are in focus, with Retail Sales due Tuesday, Nonfarm Payrolls on Wednesday, and US consumer inflation figures on Friday.
China’s central bank bought gold for the 15th straight month in January. Technical signals showed a positive but shrinking MACD histogram and an RSI of 55, with support from an uptrend line from $4,397.52 and a nearby level at $4,819.19; $5,100 was cited as a key resistance.
Gold is currently in a holding pattern around $5,050, caught between two opposing forces. On one hand, expectations for Federal Reserve rate cuts and political pressure on the central bank are weakening the US Dollar, which helps support gold prices. On the other hand, reduced geopolitical risks in the Middle East and Japan are dampening the demand for safe-haven assets.
The key events this week are the US jobs report and inflation data, which will heavily influence the Fed’s next move. We remember how surprisingly strong jobs numbers throughout 2024 delayed the start of the rate-cutting cycle that began in late 2025. If tomorrow’s payrolls or Friday’s inflation figures come in weaker than expected, it would reinforce the case for a June rate cut and likely push gold higher.
For now, this uncertainty points to potential volatility, which could be an opportunity for options traders. A big move is expected after the data, so strategies that profit from a breakout in either direction could be considered. Futures traders should be cautious about placing large bets before these critical releases, as the market is clearly waiting for a catalyst.
Underneath the surface, the long-term trend of central bank buying continues to provide a strong floor for the price. The World Gold Council reported record central bank purchases back in 2024, a trend that continued through 2025 and into this year, signaling a strategic shift away from US Treasuries. If the upcoming data is bullish for gold, a decisive break above the $5,100 resistance level could trigger a rapid move higher.
