On January 20, the gold market continued its robust upward trajectory. The Asian trading session commenced with a gap-up opening, propelling prices to an intraday peak near $4690. However, after setting a new record, the market failed to sustain the upward momentum, instead consolidating within a narrow range. The U.S. session concluded early due to a holiday, resulting in thin trading; prices oscillated within a tight band of just over ten dollars for most of the day. Ultimately, gold settled at $4669, marking another positive close on the daily chart.
A significant development over the weekend ignited market activity on Tuesday, January 20: former President Trump announced punitive tariffs on eight European nations to advance his contentious proposal to "acquire Greenland." This potent mix of geopolitical and trade policy shocks rapidly intensified market anxiety. While the initial surge, driven by sentiment, propelled prices to a new historic high, substantial profit-taking pressure emerged almost immediately on the charts, setting the stage for potentially sharp price swings. Yesterday's price action vividly illustrates the current market's "new normal": sudden geopolitical events trigger sharp, impulsive rallies to new peaks, while severely overbought technical conditions simultaneously lay the groundwork for an impending technical correction.
Undeniably, navigating the gold market has become increasingly challenging and risky. With prices at absolute historic highs, initiating new long positions is inherently an aggressive strategy. Yet, given the highly unpredictable nature of Trump's policies and his propensity for disruption, the probability of profiting from a trend-following long strategy still appears superior to contrarian shorting. Therefore, under the current circumstances, a more prudent approach is to maintain an overall bias of "seeking long opportunities on pullbacks," provided prices do not decisively break below key support levels. The core logic underpinning this view is a fundamental shift in the market's primary driver: "political instability has now superseded traditional interest rate factors as the central conflict driving gold prices." As long as this macro narrative persists, gold will retain an inherent tendency to find support and resume its ascent following each correction.
From a technical perspective, gold's current state—hovering at elevated levels yet confined to a narrow range—presents a facade of calm over underlying turbulence. The rapid, news-driven spike was followed by a consolidation phase, which diminishes the appeal of short-term trading. Consequently, maintaining a wait-and-see stance on gold for the day is advisable, avoiding entanglement in this emotionally charged market. Key technical levels to watch include the resistance zone between $4690 and $4700 above, and the crucial battle around the 5-day moving average at $4635 below. Technically, a retreat towards the 10-day moving average and the trendline is more desirable, but for a meaningful reversal, a fundamental catalyst—either negative news or a period of calm allowing time to alleviate overbought conditions—is necessary.
In summary, the most rational strategy in the current environment is to "hold long-term conviction in your heart, but keep short-term cash in your hand." Specifically, investors should shift their primary focus from "chasing profits" to "preserving capital and waiting for opportunities." Utilize the current high price levels to proactively reduce positions to a manageable size and accumulate sufficient cash reserves. Then, exercise absolute patience, waiting for the market to digest the geopolitical risk premium and for overbought technical indicators to correct. Only when gold prices retreat to and stabilize within the key support zone of $4600, or even lower towards $4530-$4560, will the timing be opportune for a new round of strategic positioning. In the midst of the present frenzy, restraint and patience are qualities more precious than gold itself.
Therefore, the intraday trading recommendations are as follows: Gold: Go long between $4655-$4660, with a stop loss at $4650, targeting $4690-$4700; hold if this level is breached. If $4650 is broken, exit longs and go short, targeting the $4600 area; hold if this level is breached.
Key economic data and events to watch today: Tuesday, January 20, 2026.
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