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- Gold reversal from $4,888 highs was halted above $4,770.
- Demand for precious metals remains steady despite the fading risk aversion.
- UP President Trump softened its attacks on Europe and allowed for some US Dollar recovery.
Gold (XAU/USD) pulled back from record highs a handful of dollars below $,4,900, following US President Trump’s softer tone at the Davos Forum, but the precious metal remains steady above $4,800, which shows that demand for safe assets remains steady.
Trump triggered a relief rally on Wednesday, stepping back on his plans to introduce additional tariffs on European countries and ruling out military action to seize Greenland. The US President also announced a framework deal over the Arctic island with NATO, although no details of the agreement have been disclosed.
Technical Analysis:
XAU/USD reversal from $4,888 record highs found buyers at the $4,770 area, which keeps the broader bullish trend intact. The pair has rallied more than 11% from January 1 and beyond 20% from early November lows, with no sign of a trend shift on the horizon so far.
Technical indicators in the 4-Hour chart endorse the bullish view. The 100-period Simple Moving Average (SMA) rises steadily, while the Moving Average Convergence Divergence (MACD) and Signal lines hover around the zero line, and the Relative Strength Index (RSI) prints at 66 after pulling back from overbought levels.
Immediate resistance is at the mentioned record high of high of $4,888. Further up, the next target is the area between the 265.8% Fibonacci extension of the January 8 to 15 rally, at $4,991, and the $5,000 round level. Supports are at Wednesday’s low near $4,770 ahead of the January 16 and 19 highs, nesr $4,690.
