1.22 Morning Gold Analysis: After a New High, Take a Break—Is a Reversal Coming?

This morning, gold didn't surge aggressively again but instead plummeted dozens of points, hovering around $4810, with considerable volatility.

The core factor remains the safe-haven sentiment supporting it. Trump, aiming to pressure Europe into concessions over Greenland, imposed tariffs on eight European countries and said he would continue to raise tariffs. The EU immediately prepared countermeasures, and tensions between the US and Europe are escalating. Additionally, the unstable situation in the Middle East has everyone fearing risk, leading to a surge in gold buying as a safe haven, with funds flowing into gold. Moreover, Russia questioned Denmark's sovereignty over Greenland, making the situation more complicated, which further highlights gold's safe-haven value.

From the trend, gold has been gradually rising along the short-term moving average, with a clear overall upward trend. However, there's a small issue—its rapid short-term gains have led to overbought conditions, with signs of a pullback on both the 4-hour and hourly charts. Therefore, the current likely scenario is consolidation and sideways movement, rather than a sudden new high.

Today, the price is likely to fluctuate between $4840 and $4810, with bulls and bears battling each other. If US-EU trade tensions escalate further, gold may attempt to reach a new high again; if more traders take profits and exit.

For trading, stick to the usual rules: don't chase highs! Wait until a pullback to $4850-$4840 is confirmed and then take a small long position. Set stop-loss below $4820. First target: $4880-$4885. If volume increases and the price breaks through $4890, add to the position and aim for $4900. Also, keep an eye on geopolitical news and the dollar's movements. If the situation suddenly eases, gold may cool off in the short term, so position sizes should be controlled.