Gold eyes $4,700 after successful test of $4,600 support

Gold wrapped up 2025 with a stiff pullback from the $4,550 zone, testing the resilience of its medium-term uptrend. Although bears tried to break its backbone, the underlying support refused to buckle. Last week saw traders step in to buy the dip. This morning, however, the metal shattered a historic barrier by surpassing $4,600 for the first time. With that milestone behind it, the rally now has a clear shot at $4,700.

The New Year's correction did the market a favor: it allowed the daily RSI to cool off from overbought extremes, thus clearing the runway for another push to new highs. However, the Stochastic Oscillator is waving a yellow flag with a fresh sell signal, suggesting that it may be too soon to chase the move. Charts point to a likely pause or shallow retreat toward the rising trendline—a zone where initiating long positions would carry much better odds. The bull trend will stay alive as long as the $4,400 level remains unbroken.

With tensions simmering in Venezuela and Iran, gold is in no danger of losing its safe-haven appeal. Yesterday's remarks from Federal Reserve (Fed) Chairman Jerome Powell added jet fuel to the rally. The policymaker revealed that the Justice Department has subpoenaed the central bank and is now threatening criminal charges over alleged overspending on its headquarters renovation—a pretext he labeled as merely formal. The underlying message was clear: the drumbeat for faster rate cuts is growing louder.

In this supercharged environment, UBS analysts have raised their Q1 2026 gold target to $5,000 per ounce. HSBC echoes this view for the first half of the year. Their models show physical demand climbing to 4,850 tons this year, a level not seen since 2011. As geopolitical uncertainty drives central banks to stock up on bullion, institutional and retail investors are quickly falling in line.

Pay attention to the trading strategy outlined below:

Buy gold in the $4,500–$4,600 range. Lock in profits at $4,700. Place Stop loss at $4,400.