Gold XAUUSD reverses sharply - Forex signals and news once again trigger movement

We are entering a week where the price of gold (XAUUSD) is at a turning point. Yesterday, it experienced a slight correction, touching $5,035 after two consecutive days of strong upward movement. This movement is a key example of the market rules in forex trading. Major news often triggers price swings. Traders and investors are waiting for clear signals to decide their next move.

Currency War: When China Challenges the Dollar’s Dominance

The most significant forex news driving the gold market is happening in the central bank’s office. The People’s Bank of China (PBOC) continues to buy gold into reserves for the 15th month in a row, accumulating up to 74.19 million ounces. The truth is, China is clearly announcing to the world that “we will no longer rely on the US dollar.”

Behind the dollar printing without news and rising asset prices, the major issue for the US regarding public debt still indicates an unstable economic system. US financial policymakers are managing policies filled with confusion. Most notably, Scott Bessent, US Treasury Secretary, gave an interview on Fox News blaming Chinese speculators for gold price volatility, while the real reason is distrust in the value of their own currency.

Fed Drama: When Politics Interferes with Financial Stability

Another unreliable forex news: Scott Bessent threatened to investigate Kevin Warsh (a future Fed chairman candidate) if this “dog” does not cut interest rates. This signals a broader message to the market: the central bank’s independence is no longer intact but has become a political tool.

What are the consequences? If the market believes the Fed must follow political directives, the dollar could become worthless paper. Then, gold would become a truly valuable asset. Data from Nonfarm Payrolls on Wednesday and CPI on Friday could test this theory.

Technical Signals for XAUUSD: Where Is Gold Price Stopping?

From a chart perspective, gold broke a new high at $5,070 at Monday’s open before retreating to close around $5,035. The upward momentum remains strong as the 12- and 26-EMA lines just crossed upward around $5,000. This is a key signal indicating a potential reversal from a downtrend.

However, the Stochastic RSI indicator is in the overbought zone, suggesting buying momentum is waning. A short-term pause or consolidation may occur before the next move higher.

Important price levels to watch:

• Resistance: $5,093–$5,144 (previous high + Fibonacci 61.8%)
• Support: $4,921 and $4,860 (bottom support levels)
• Upward target: $5,346 (Fibonacci 78.6%)

Forex News Signal: Iran-US Tension Eases or Just a Short Play?

This news cycle also includes updates on negotiations between Iran and the US. Iranian officials say there has been “progress,” but Trump claims, “if it’s not fully settled, good things are still ahead.” This ambiguity causes markets to hesitate.

Gold markets tend to react sharply to geopolitical news. When risk sentiment improves, and profits are booked, gold is sold off in favor of risk assets like the S&P 500, which is approaching all-time highs. But remember, gold’s safe haven status remains as long as political uncertainty persists.

Heraeus warns that the gold market is entering a high-volatility regime. Therefore, a price decline due to news is just a shakeout, not a sign that the bullish trend has ended.

Support and Resistance Levels

Trading Outlook: Three Approaches for Different Traders

For short-term traders: The $5,000–$5,035 zone is the main battleground. Look for buying opportunities gradually around $4,970–$5,000 aiming for $5,070–$5,093. Set tight stop-losses due to high volatility.

For medium-term holders: Wait for key economic data this week, especially NFP on Wednesday and CPI on Friday. If the numbers disappoint (worse than expected) and prices break above $5,093–$5,144, it could be a good buy signal, targeting $5,300–$5,400.

For gold holders: No need to sell now. Most of this week’s movement is a consolidation phase by major players. The fundamental outlook remains strong: central banks are still buying, inflation persists, and geopolitical issues continue. Hold long-term, waiting for a breakout amid ongoing uncertainty.

Frequently Asked Questions

How many weeks will it take for gold to reach a new all-time high?
Heraeus believes it will take several months to see a true new high. However, if NFP and CPI data this week are significantly worse than expected, and the Fed signals possible rate cuts, gold could reach $5,300–$5,500 by mid-month.

Should I buy now at $5,000 or wait?
It depends on your timeframe. For medium-term traders, this week still holds important data that could create better buying opportunities. Long-term fundamentals remain strong; the sky is still open for prices to rise further.