Gold rises to a new monthly peak amid trade war concerns, geopolitical tensions, and a softer U.S. dollar.

• Gold extended its rally for a fourth consecutive session, supported by a mix of favorable drivers.
• Ongoing trade uncertainties and escalating geopolitical tensions continued to bolster demand for the safe-haven metal.
• Expectations of Federal Reserve rate cuts, along with a broadly softer U.S. dollar, offered further support to the non-yielding asset.

Gold (XAU/USD) posted its strongest-ever weekly close above the $5,100 level on Friday and carried that momentum into the new week. The metal has now advanced for a fourth consecutive session, climbing past $5,150 during the Asian session to reach a fresh monthly high. Persistent trade-war concerns and escalating geopolitical tensions in the Middle East continue to channel safe-haven flows into bullion.

U.S. President Donald Trump introduced a new trade framework after a Supreme Court ruling blocked his earlier sweeping tariff plan, announcing a 15% global tariff on imports—the maximum permitted under the law. The move heightened fears of retaliatory action and broader economic fallout from supply chain disruptions, dampening risk appetite and reinforcing demand for gold as a defensive asset.

On the data front, Friday’s release showed the U.S. Personal Consumption Expenditures (PCE) Price Index rose 2.9% year-over-year in December, while the core measure increased 3.0%, tempering expectations of a March rate cut by the Federal Reserve. Even so, markets continue to anticipate the possibility of two 25-basis-point reductions later this year.

Those expectations were supported by weaker U.S. growth figures, with GDP expanding at a 1.4% annualized pace in the fourth quarter—slowing sharply from 4.4% in Q3—amid the longest government shutdown on record. Combined with trade-related uncertainty, the softer growth backdrop has pulled the U.S. dollar back from last week’s highs, adding further support to non-yielding gold.

Additionally, the risk of military confrontation between the U.S. and Iran has contributed to the metal’s upward momentum. Officials from both sides are scheduled to meet in Geneva on Thursday after Iran submitted a detailed nuclear proposal. Reports indicate that President Trump is weighing potential military action if diplomatic efforts fail to restrain Tehran’s nuclear ambitions, further underpinning safe-haven demand.

XAU/USD H4 chart

Gold buyers remain in control, with Friday’s surge beyond the $5,100 level still holding firm.

From a technical standpoint, the solid upside continuation at the beginning of the week confirms last Friday’s breakout above the $5,100 horizontal resistance, reinforcing the bullish outlook for XAU/USD. The MACD remains above both the Signal line and the zero level, while the expanding positive histogram points to building upward momentum.

In addition, gold is trading comfortably above the ascending 200-period EMA, which underpins the current advance and keeps the near-term bias skewed to the upside. However, the RSI at 73.23 signals overbought conditions, suggesting that immediate gains could be capped.

As long as prices stay above the rising 200-period EMA at $4,864.04, the broader bias remains constructive, with dips likely to be limited. The MACD continues to support the bullish case, though a narrowing histogram would indicate fading momentum. With the RSI stretched into overbought territory, a period of consolidation or mild pullback may emerge before the uptrend resumes. Still, holding above the 200-period EMA would preserve the overall recovery structure, even if short-term consolidation unfolds.

Sources: Haresh Menghani