Gold Analysis: Will it Maintain the Uptrend After the Decline from the All-Time High? – January 7, 2026

Current Gold Situation: Natural Correction or Warning of Reversal?

Gold experienced a correction phase during Wednesday’s trading, with the spot price declining by about 0.7% to reach $4,466.19 per ounce, while February 2026 futures fell by 0.4% to record $4,477.30 per ounce. This decline comes after the precious metal hit its all-time high at $4,549.71 per ounce on December 26, 2025, marking an annual gain of 64% in 2025, its strongest yearly performance since 1979.

Despite this temporary pullback, gold maintains a strong bullish structure reflecting investor confidence in the overall trend. The current pressures are mainly due to natural profit-taking after a sharp rally, along with the strength of the US dollar ahead of critical US economic data this week.

Technical Outlook: The Structure Indicates Upcoming Buying Opportunities

Gold is currently moving within a narrow range between $4,455 and $4,491, a range often preceding a strong price movement. Technically, the metal retains a typical upward chart pattern, with the $4,450 level shifting from resistance to strong support, reflecting robust buying demand at each rebound.

The MACD indicator shows convergence above zero, indicating a momentum accumulation phase ahead of a breakout above $4,555. The Relative Strength Index oscillates around 68-72, near overbought levels, but the strength of the uptrend allows it to stay in this zone without significant corrective pressure.

Critical Technical Levels:

• Resistance levels: $4,525, $4,600, $4,680
• Support levels: $4,370, $4,290, $4,220

Macroeconomic Factors: Continued Support Despite Short-term Volatility

Dollar strength is temporary and not a reversal of the trend

The US dollar is near its highest levels in over two weeks, but this consolidation reflects cautious anticipation ahead of the non-farm payrolls report. Markets are not betting on a sharp economic slowdown but are viewing upcoming data as a test of monetary policy direction. This means the current dollar strength is a temporary phenomenon linked to anticipation, not a sign of a fundamental long-term shift in the structural trend.

Reduced geopolitical risks lessen the risk premium

The agreement between Caracas and Washington on Venezuelan oil exports has somewhat eased tensions, reducing the geopolitical risk premium that had increased earlier this year. However, the fragility of this balance keeps investors alert, as the easing is seen as temporary, maintaining safe-haven demand for gold as a strategic option.

Major financial institutions support the bullish trend

Morgan Stanley expects gold to reach $4,800 per ounce by Q4 2026, supported by declining real interest rates and a potential shift in Federal Reserve leadership, along with continued central bank and institutional buying. These forecasts reflect a growing consensus that the global interest rate cycle is heading toward further easing.

Citi expects that maintaining trading above $4,400-$4,500 during January will be a strong indicator of the structural trend’s resilience, with the possibility of retesting historic highs if employment data show clear signs of slowdown.

Key Events Expected This Week

• (ADP) Private Payrolls Report: To be released today for December, a sensitive indicator measuring changes in US private sector employment before the official data.

• Federal Reserve Officials’ Statements: Even outside official meetings, Fed officials’ comments on interest rate policy are a sensitive factor; dovish tones typically pressure the dollar and support gold.

• US Crude Oil Inventories: A decline in inventories reflects stronger economic activity and may limit gold inflows, while increases raise concerns over slowing global demand and boost safe-haven demand.

Trading Strategies on Halal Trading Platforms

For investors committed to Islamic finance principles, halal trading platforms offer opportunities to profit from gold price movements without violating Shariah rules. Traders on these platforms can benefit from the long-term bullish trend of gold while remaining compliant. Shariah-compliant tools free from riba (interest) allow portfolio diversification and capitalize on increasing safe-haven demand for precious metals.

Future Outlook: The Gap Between Short and Long Term

Recent gold performance highlights a significant divergence between optimistic long-term expectations and short-term price movements. Structurally, financial institutions remain bullish, driven by expectations of rate cuts and rising geopolitical and economic risks.

In contrast, short-term markets move tactically, including profit-taking, repositioning, and risk reduction ahead of key events. This divergence encourages some investors to adopt selective strategies, separating short-term trading from long-term position building.

Summary

After achieving extraordinary gains of 64% in 2025 and reaching a historic peak at $4,549.71 per ounce, gold is currently in a natural profit-taking phase. However, the strong technical structure and solid macro supports suggest that current corrections are buying opportunities within a long-term bullish trajectory.

As long as the macro environment remains characterized by rising risks, declining certainty, and ongoing demand for effective hedging tools, gold remains in a strategic strong position. Investors monitoring this week’s key economic events may find attractive entry points if support levels at $4,400-$4,500 hold.