• Gold steadies below record highs as investors adopt a wait-and-see stance ahead of US inflation data.
• Safe-haven demand remains firm, underpinned by geopolitical tensions and uncertainty around Federal Reserve independence.
• Technically, the broader trend remains bullish, but near-term price action suggests a period of consolidation or pullback risk.

Gold (XAU/USD) treads water on Tuesday as the market shifts into wait-and-see mode ahead of the release of US inflation data at 13:30 GMT. At the time of writing, XAU/USD trades around $4,585, consolidating just below Monday’s record peak near $4,630.

The precious metal remains underpinned by steady safe-haven demand as geopolitical and economic uncertainty keep investors cautious. Markets remain unsettled by the criminal investigation into Federal Reserve (Fed) Chair Jerome Powell, which has revived concerns over the central bank's independence.

At the same time, risk sentiment has been hit by fresh geopolitical developments after US President Donald Trump threatened a 25% tariff on countries doing business with Iran amid nationwide anti-government protests.

This follows earlier US actions in Venezuela, where Washington carried out a military operation against President Nicolás Maduro, as well as Trump’s renewed rhetoric over strategic interests in Greenland.

Looking ahead, attention is squarely on the US inflation report. Economists expect the Consumer Price Index (CPI) to come in at 0.3% MoM and 2.7% YoY, both unchanged from the previous month. The data could help shape near-term expectations for the Fed and drive the next move in Gold.

Market movers: Markets jittery as DOJ probes Powell, Fed independence in focus

• The US Department of Justice issued grand jury subpoenas as part of a criminal investigation into Federal Reserve Chair Jerome Powell, linked to his Senate testimony on the Fed’s $2.5 billion headquarters renovation project. Powell said the move is politically motivated and stressed that the Fed will continue to set policy based on economic conditions rather than political pressure.
• Adding to concerns over Fed independence, US President Donald Trump is expected to announce a potential replacement for Jerome Powell later this month, with Powell’s term as Fed Chair ending in May 2026. Markets widely expect Trump to nominate a candidate more closely aligned with his policy views, reinforcing uncertainty around the future direction of US monetary policy.
• On the monetary policy front, markets are currently pricing in around two Fed rate cuts this year. However, last week’s US employment report showed the labour market is holding up better than many feared, tempering expectations for aggressive easing and reinforcing the view that the Fed can afford to keep interest rates unchanged at its January meeting.
• Attention also remains on the US Supreme Court, which is due to hold an opinion day on Wednesday on the legality of Trump-era tariffs. At the same time, the court is set to hear arguments on January 21 in the case over Trump’s attempt to remove Fed Governor Lisa Cook.
• Major investment banks remain broadly bullish on Gold’s outlook. Bank of America, JPMorgan, Goldman Sachs, Morgan Stanley and UBS expect prices to hold in the $4,500-$5,000/oz range through 2026, citing anticipated Fed rate cuts, rising debt concerns, steady central bank and ETF buying, and persistent geopolitical uncertainty, according to Reuters.

Technical analysis: Gold pauses below $4,600

XAU/USD bulls are taking a breather after the recent rally, as overbought signals on both the daily and 4-hour charts triggered mild technical selling.

On the 4-hour chart, RSI has eased after topping above 70, with bearish divergence signalling fading upside momentum in the short term, even as the broader trend remains constructive.

On the downside, initial support is seen in the $4,525-$4,500 zone, where the 21-period Simple Moving Average (SMA) aligns. A decisive break below this area could open the door for a deeper corrective move toward the $4,400 level.

On the upside, a sustained move above $4,600, followed by a break of the all-time high near $4,630, could pave the way for gains toward $4,700-$4,750.