• Gold surges to a fresh all-time high near $4,690 after opening the week with a strong bullish gap.
• Trade tensions and a softer US Dollar underpin demand for the safe-haven metal.
• Technically, XAU/USD remains in a strong uptrend, with immediate support seen around $4,650, followed by $4,600.

Gold (XAU/USD) starts the week with a strong bullish gap, pushing deeper into uncharted territory as safe-haven demand strengthens. The move comes after US President Donald Trump threatened tariffs on several European Union (EU) nations over control of Greenland, reviving trade tensions and injecting fresh geopolitical risk into already fragile market sentiment.

At the time of writing, XAU/USD trades around $4,667, consolidating just below the fresh all-time high near $4,690, up nearly 1.85% on the day.

Trump’s renewed trade rhetoric has added to market unease and drawn criticism from European officials, undermining confidence in US assets and weighing on the US Dollar (USD).

The weaker Greenback is adding another layer of support to Gold, even as traders scale back near-term expectations for a Federal Reserve (Fed) interest rate cut.

Looking ahead, US markets are closed on Monday for Martin Luther King Jr. Day. Attention will then shift to a batch of delayed US economic data on Thursday, including the Personal Consumption Expenditures (PCE) inflation reports and the third-quarter Gross Domestic Product (GDP) release. On Friday, the focus turns to the preliminary S&P Global Purchasing Managers Index (PMI) surveys and the University of Michigan consumer sentiment data.

Market movers: Trade tensions flare as Fed leadership shift looms

• Over the weekend, President Donald Trump posted on Truth Social that a 10% tariff would be imposed from February 1 on eight European nations, including Denmark, Germany, France, the UK, Sweden, Norway, the Netherlands and Finland, adding that it would rise to 25% in June unless and until “a deal is reached for the complete and total purchase of Greenland.”
• In response, European Commission President Ursula von der Leyen and European Council President António Costa warned in a joint statement that tariffs would “undermine transatlantic relations and risk a dangerous downward spiral.” French President Emmanuel Macron has also urged the bloc to activate the European Union’s “anti-coercion instrument.”
• European leaders are set to hold an emergency meeting later this week to discuss possible countermeasures, with EU ambassadors considering activating 93 billion euros in tariffs that were prepared in response to Trump’s trade measures last year.
• The new tariff threat comes as the US Supreme Court is expected to rule soon on the legality of President Trump’s use of emergency tariff powers. The court is also set to hear arguments on Wednesday in a separate case linked to Trump’s attempt to remove Fed Governor Lisa Cook over mortgage-fraud allegations.
• Markets are also watching developments around Fed leadership change, with President Trump expected to announce his decision this week. Trump indicated on Friday that he may keep National Economic Council Director Kevin Hassett in his current role rather than naming him as Fed Chair. The comments have boosted speculation that former Fed Governor Kevin Warsh could emerge as a leading candidate.
• On the monetary policy front, recent US economic data have reinforced the view that the Fed is likely to stick to a gradual easing pathrather than aggressive rate cuts. Markets are almost fully pricing in no change at the upcoming January meeting and broadly expect the central bank to remain on hold through the first quarter. According to the CME FedWatch Tool, June is currently seen as the most likely timing for the first rate cut this year, with probabilities around 45%.

Technical analysis: Uptrend intact above key support levels

From a technical perspective, the XAU/USD rally shows no signs of slowing, with the metal continuing to trade comfortably above its key moving averages on both the hourly and daily timeframes. Bullish momentum remains intact, even as the daily Relative Strength Index (RSI) stays in overbought territory.

On the 4-hour chart, the bullish gap has helped XAU/USD break above its recent consolidation range, with the former ceiling near $4,650 now acting as immediate support, followed by the 21-period Simple Moving Average (SMA) around $4,566.

A sustained break below $4,550 would shift focus toward the $4,500 psychological mark, near the 50-period SMA around $4,491.

The Moving Average Convergence Divergence (MACD) histogram has shifted into positive territory and is expanding, with the MACD line above the Signal line, suggesting strengthening upside momentum.

The Relative Strength Index (RSI) is near 62, turning higher after briefly dipping below the 50 threshold, keeping the broader bullish bias intact.