Gold sets bar even higher due to intensified safe-haven demand

Gold prices have recently jumped above the psychologically important level of $5,000 per ounce, setting a new historical high at $5,093. Such a surge was driven by a sharp decline in the greenback. The dollar index fell to a four-month low, undermining investor confidence in the American currency as a reliable asset and shifting market attention to the precious metal. Denominated in greenbacks, it became more affordable for holders of other currencies, driving bullion demand even crazier.

Moreover, previous tailwinds remain intact. Active purchases by global central banks and other institutional investors keep underpinning gold prices. These buyers consider the precious metal a hedging tool against debt risks and currency devaluation, particularly in the pair with the yen.

Heightened geopolitical tensions continue to impact the market, fueling safe-asset demand. The US-Iran standoff, with new sanctions and military transfers coming up, keeps heating the environment. The Eastern Europe situation also shows little optimism despite diplomatic efforts. This permanent uncertainty compels traders to seek safety in assets like gold.

From a technical standpoint, signs of a potential correction are seen on January 26 following the recent surge. The Relative Strength Index (RSI) has just reached an extreme level of 93, signaling overbought conditions. The Chaikin Oscillator is hovering close to the peaks but doesn’t confirm a trend reversal, indicating continued volume-based support for the uptrend. Given the technically overextended position alongside persistent fundamental demand, gold may consolidate to relieve excess pressure. However, from a broader perspective, there are no reasons for a deeper correction.

Take a look at the trading plan down below:

Buy gold near $5,030. Place Take profit at $5,170 and Stop loss at $4,899.

This forecast is valid from January 26 till February 2, 2026.