Gold Holds Near Two-Week Peak Ahead of Fed Moves

Key Moments

Gold trades above 5045 USD per ounce, holding close to a two-week high as market sentiment leans toward a softer Federal Reserve stance.
Weaker US retail sales data in December increased concerns about an economic slowdown and reinforced expectations of multiple Fed rate cuts this year.
Technical patterns indicate consolidation in XAU/USD after an early-February drop, with prices oscillating in a 5000–5080 range and volatility easing.

Macro Drivers Behind the Latest Gold Upswing

Gold prices on Wednesday remained above 5045 USD per ounce, trading close to a two-week high. The move has been underpinned by market expectations that the Federal Reserve will adopt a more accommodative policy stance.

The latest leg of the advance accelerated after weaker-than-expected US economic data. December retail sales figures missed forecasts, signaling softer consumer activity and heightening concerns about a cooling economy.

Against this backdrop, derivatives pricing indicates that the market now assigns a higher likelihood to three Fed rate cuts this year than it did two weeks earlier.

Upcoming US Data and Monetary Policy Outlook

Investors are focused on forthcoming US employment and inflation releases, which could provide further clarity on the health of the economy and the Federal Reserve’s potential policy trajectory. These indicators are seen as critical in shaping expectations for the regulator’s next steps.

Central Bank Demand and Geopolitical Support

Physical demand from official institutions continues to offer additional support to the gold market. The People’s Bank of China expanded its gold holdings in January for the 15th consecutive month, underscoring sustained central bank interest.

Geopolitical tensions are also contributing to the metal’s resilience. Market participants remain attentive to US–Iran developments, even though talks showed a positive start last week.

Technical Picture: Recovery and Consolidation

Technical signals on XAU/USD highlight a market that has transitioned from sharp volatility to consolidation.

Timeframe	Key Levels / Indicators	Market Structure
H4 (4-hour)	Collapse from 5550–5600 to lows near 4400 in early February; Stabilization around 5000–5050; Price near middle line of Bollinger Bands; Gradual narrowing of Bollinger Bands.	Recovery phase following a sharp decline; Decreasing volatility and consolidation after strong price swings.
H1 (1-hour)	Trading range: 5000–5080; 5080 acting as local resistance; 5000 acting as support.	Neutral configuration; Balanced market with attempts at steady gains but no clear momentum.

Market Assessment and Outlook

Overall, the latest advance in gold to a two-week high is closely tied to a shift in expectations toward a more dovish Federal Reserve, reinforced by soft US retail data. From a technical standpoint, the metal appears to be stabilizing and consolidating within a broader recovery framework, yet price action remains confined to a range and lacks a decisive directional move.

Near-term performance is set to be highly sensitive to incoming US inflation and labor market data, which will either confirm or undermine the recent repricing toward softer policy. Meanwhile, persistent central bank purchases and ongoing geopolitical risks are helping to establish a structural floor under prices. However, a sustained move above the current consolidation zone is likely to require a clear catalyst from upcoming macroeconomic releases.

By RoboForex Analytical Department

Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.