Spot gold accelerated its ascent during the Asian trading session on Wednesday, with prices currently hovering around $4865 per ounce, marking a staggering intraday surge of $102. Valeria Bednarik, Chief Analyst at FXStreet, provides an analysis of gold's technical outlook. The spot gold price has reached a peak of $4865.65 per ounce, setting a fresh record high.
Bednarik stated that the spot gold price has hit another historic peak, driven by risk aversion continuing to dominate financial markets. This latest flight to safety was once again triggered by US President Donald Trump, who remains engaged in strategic games with nations worldwide under his "Make America Great Again" agenda. Bednarik pointed out that gold is currently in an extremely overbought state; however, the prevailing risk-off sentiment suggests that prices are poised for further gains and the establishment of more new highs. Geopolitical tensions and expectations for Federal Reserve interest rate cuts have recently underpinned gold prices. Additionally, concerns regarding the Fed's independence have triggered movements favorable to gold. A report on Monday indicated that, according to informed sources, Fed Chair Jerome Powell plans to attend a hearing at the Supreme Court this Wednesday regarding President Trump's attempt to remove Federal Reserve Governor Cook. Last October, the Supreme Court declined to allow Trump to oust Cook immediately; Cook has filed a lawsuit to retain her position. This ruling means Cook can remain in her post, at least until the Supreme Court holds oral arguments on the case this week and issues a subsequent ruling. Fed watchers and legal analysts suggest that the outcome of this case will have profound implications for whether President Trump has the authority to dismiss a Fed governor, and consequently, impact the Fed's ability to set interest rate policy free from political interference. A UBS report on January 16th stated bluntly that this trial concerns the very survival of the Federal Reserve's independence. If the court rules to allow the White House to bypass the Federal Reserve Act and remove Governor Cook "for cause," the legal pathway for Powell's dismissal would be wide open. Powell's term as Chair ends on May 15, 2026. Analysis of Gold's Technical Outlook Bednarik noted that from a technical perspective, despite the substantial rally, gold remains in a bullish trend. On the 4-hour chart, the price is positioned above all its moving averages, with the 20-period Simple Moving Average (SMA) above the 100-period and 200-period SMAs. The 20-period SMA provides dynamic support around $4653.79, the 100-period SMA offers support near $4506.90, and the 200-period SMA provides a base around $4411.78. Meanwhile, the Relative Strength Index (RSI) maintains a bullish stance with a reading of 73, and the Momentum indicator also points firmly higher, showing no signs of upward exhaustion.
Bednarik added that on the daily chart, the gold price is well above all its moving averages. The 20-day SMA is accelerating upwards, breaking above the 100-day and 200-day SMAs, and providing support near $4497. Meanwhile, although both the RSI and Momentum indicators are at extreme levels, they maintain strong upward momentum, signaling that gold prices are likely to achieve even higher highs in the future. At 12:48 Beijing time, spot gold was quoted at $4865.33 per ounce.
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