On January 12th, a sharp escalation in geopolitical risks directly stimulated demand for safe-haven assets, driving a strong surge in the price of spot gold. During the Asian trading session on Monday (January 12th), spot gold extended its gains from the previous two trading days; as of 09:00, it recorded an intraday increase of approximately 1.7%, briefly touching a historic high of $4601 per ounce before retreating slightly. It is currently trading near $4580 per ounce. Spot silver also hit a new historic high during the early morning session, reaching $84.
Fundamental factors are the primary drivers, with geopolitical risks heating up comprehensively. Recent sudden escalations in US-Iran tensions are impacting global markets; on one hand, large-scale protests have erupted in Iran due to an economic crisis, creating domestic instability; on the other hand, US President Trump has publicly threatened potential military or other forms of intervention to support the protesters. Late on the 11th local time, the Israeli Defense Forces stated that, while they had notified the Lebanese government army about military activity at the location a week prior, the related infrastructure had not been fully dismantled, leading to the decision to take action again, conducting another airstrike that day on an underground weapons storage facility used by Hezbollah in Lebanon. In Europe, the Russia-Ukraine conflict remains deadlocked; strong explosions were heard in Kyiv, Ukraine's capital, and although media reports do not indicate substantial NATO deployment into Ukraine, the necessary funding and personnel are already in place, making it a de facto situation.
Federal prosecutors in the United States have launched a criminal investigation into Federal Reserve Chairman Jerome Powell. Led by a prosecutor appointed by Trump, this investigation is widely seen as political pressure from the Trump administration on the Fed due to disagreements over interest rates. Powell confirmed the news on Sunday evening (January 11th), stating, "This matter concerns whether the Fed can continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be subject to political pressure or coercion."
Amid soaring gold prices and a depreciating US dollar, the dollar's share of global foreign exchange reserves has been declining consecutively. The trend of global asset de-dollarization is evident in 2025, as more countries increase their gold holdings; for the first time in nearly 30 years, global central banks' gold holdings have surpassed their holdings of US Treasury bonds. By mid-2025, the proportion of US Treasuries in the reserves of central banks (excluding the Fed itself) fell below 25%, while gold's share rose above 25%. This marks the first time since 1996 that gold's proportion in central bank reserves has exceeded that of US Treasuries.
From a technical perspective, looking at the daily chart structure of gold, although last week's performance was predominantly strong, it was largely driven by news factors. The stagnation in the latter part of the week also indicated that bullish momentum was not very strong or consistent. The deterioration of the geopolitical situation over the weekend led to today's gap-up opening and rally, further proving the market bulls' strong reliance on fundamentally positive news. Under such extreme market conditions, the rhythm of gold's movement can no longer be analyzed through conventional technical lenses. Although there is mid-term trendline resistance near 4600, if fundamental factors continue to develop and intensify, and the market once again speculates heavily on safe-haven sentiment, then gold breaking above 4600 is possible. However, this kind of movement is difficult to predict, as it is highly dependent on favorable fundamental news.
Combining the one-hour chart for gold, the current state is clearly strong, with the price having broken through the previous high of 4550 and now reaching a new historic milestone near the 4600 mark. The short-term key support level has consequently moved to around 4550, while resistance is near the 4600 psychological barrier. The current market is quite uncertain and volatile; it is unclear whether the early-week move represents a continuation of the bullish trend or merely a fleeting spike. For us, maintaining a bullish outlook and executing stable trades by buying on dips remains the superior strategy.
Today's trading suggestion: If gold pulls back to the 4550-55 area during the day, consider a short long position with a stop loss at 4540, targeting 4600-4610!
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