Key Moments
- XAU/USD traded near $4,880 on Friday after rebounding from an intraday low of $4,655 in Asian hours.
- Technical setup indicates a potential Gartley pattern, with upside scope toward the $5,340 area, subject to key resistance levels.
Gold Edges Higher in Risk-Off Trade
Gold (XAU/USD) adopted a moderately bullish tone on Friday, moving closer to the $4,900 area as risk aversion underpinned demand for safe-haven assets. At the time of writing, the metal was trading around $4,880, recovering from a drop to $4,655 earlier in the Asian session.
Market sentiment has turned cautious following a three-day decline in Wall Street equities, a move that has spilled into foreign exchange markets and increased appetite for traditional hedges such as gold. This risk-off backdrop has offered support to the metal even as a firm US Dollar has limited the extent of the rebound.
Macro Backdrop: Fed Cut Expectations Lend Support
Gold has also drawn strength from weaker US employment data released earlier in the week. The softer labor figures have revived expectations that the Federal Reserve may need to ease borrowing costs further, a scenario typically seen as constructive for non-yielding assets like gold.
Although the US Dollar’s resilience has restrained upside momentum, the combination of risk aversion and heightened speculation about additional policy easing has helped gold recoup part of its recent losses.
Technical Picture: Watching a Potential Gartley Formation
On the 4-hour chart, XAU/USD was last seen around $4,876, trading below the 100-period Simple Moving Average (SMA). Despite this, several technical signals point to gradually improving momentum.
The Moving Average Convergence Divergence (MACD) indicator shows a contracting negative histogram, while the MACD line appears close to crossing above the signal line. At the same time, the Relative Strength Index (RSI) has moved back into neutral territory after previously reflecting bearish conditions.
Although the short-term trend is still negative, Thursday’s higher low has provided some encouragement for bullish participants. The turn in momentum indicators suggests that price action may currently be forming the CD leg of a potential Gartley pattern, with an upside objective near the 78.6% Fibonacci retracement of last week’s decline, located at $5,340.
If gold prices continue to hold above $4820, they are expected to continue moving towards the psychological level of $5000.
If gold prices fail to break through $4820, it may trigger a deeper pullback.
Do you agree with the bullish trend? pic.twitter.com/S2kQGgqKcB
— Diana–CFA (@Diana_xauusd) February 6, 2026
Key Technical Levels
Before any test of $5,340, gold faces several resistance levels that may challenge buyers. The first notable barrier is the 100-period SMA, currently near $4,920. Above that, the next significant resistance zone is the weekly high around $5,100.
On the downside, initial support is seen at the session low of $4,655, followed by another important floor around Monday’s low in the $4,400 area.
| Level | Type | Approximate Value |
|---|---|---|
| $5,340 | 78.6% Fibonacci / Potential Gartley target | Resistance |
| $5,100 | Weekly high area | Resistance |
| $4,920 | 100-period SMA (4-hour) | Resistance |
| $4,880 | Current trading area (Friday) | – |
| $4,655 | Session low (Asian trade) | Support |
| $4,400 area | Monday’s low | Support |
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Why do people invest in Gold?
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Who buys the most Gold?
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
How is Gold correlated with other assets?
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
What does the price of Gold depend on?
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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