Gold stabilizes despite declining safe-haven demand

22 Ocak 2026

Gold (XAUUSD) stabilizes despite declining safe-haven demand: Where are prices headed amid U.S. inflation data?

Written by: Rania Gule, Senior Market Analyst at XS.com – MENA

Gold is experiencing a delicate phase at the beginning of 2026 that clearly reflects a fragile balance between geopolitical, economic, and monetary factors. The yellow metal has managed to recover a significant portion of its early losses and maintain trading above the $4,800 per ounce level, even approaching $4,925, despite a slowdown in upward momentum compared with the record highs reached earlier. From my perspective, this price behavior cannot be viewed as merely a short-term corrective move; rather, it reflects a growing conviction among investors that gold has become a strategic asset to be bought on dips, even amid a decline in traditional safe-haven demand.

I believe the return of buyers at relatively lower levels indicates that markets recognize the supportive factors for gold have not disappeared, but rather have changed in nature. Investors are no longer focused solely on immediate geopolitical risks; instead, they are increasingly concentrating on the medium-term trajectory of U.S. monetary policy. While easing fears of a broad trade war or confrontation with European allies has reduced defensive demand for gold, this impact has been relatively limited, underscoring that the market has become more mature and less reactive to short-term political headlines.

It is important to note that the improvement in global risk appetite, following U.S. President Donald Trump’s retreat from tariff threats and the exclusion of geopolitical escalation scenarios, has exerted clear pressure on gold prices. However, in my view, this pressure has been weaker than historically expected in similar situations. This suggests that investors have become more cautious about overpricing positive news, particularly in a global economy still grappling with slowing growth, elevated debt levels, and uncertainty over the sustainability of the recovery.

The U.S. dollar has naturally benefited from the decline in geopolitical concerns and the fading of what was known as the “sell America” trade, which has limited gold’s ability to post further gains. Nonetheless, I see the dollar’s current strength as lacking long-term momentum, as expectations of two additional interest rate cuts in 2026 impose a natural ceiling on any sustained appreciation of the U.S. currency. This specific factor provides gold with a solid support base, since a non-yielding asset becomes more attractive as real yields decline.

From my standpoint, the intense anticipation surrounding the U.S. Personal Consumption Expenditures price index reflects market awareness that the coming phase will be decisive in shaping gold’s direction. This indicator is not merely an inflation figure; it is the primary compass guiding the Federal Reserve’s decisions. Any sign of easing inflation would be immediately interpreted as a green light for further monetary easing—a scenario I see as strongly supportive of gold returning to test, and possibly surpass, its historical highs.

At the same time, it cannot be ignored that markets have already priced in a significant portion of the rate-cut scenario, meaning that positive surprises may have a more limited impact compared with negative ones. Nevertheless, I believe concerns surrounding the independence of U.S. monetary policy, amid growing discussion of potential political interference, will remain a source of pressure on the dollar and an indirect support for gold, even if this is not immediately reflected in daily price movements.

Recent geopolitical developments, particularly talk of progress toward a Ukrainian peace process, have undoubtedly weakened gold’s appeal as a safe haven. Yet from a deeper analytical perspective, I believe these developments, despite their importance, do not eliminate broader structural risks, whether related to the reshaping of the global order or shifting economic power balances. Therefore, any decline in gold prices driven by positive political news may represent more of an investment opportunity than an exit signal.

In my final assessment, I expect gold in 2026 to remain within relatively elevated ranges, with a gradual upward bias supported by expectations of rate cuts, weaker real yields, and persistent global economic uncertainty. While periods of volatility and correction are likely, particularly amid improving risk appetite, I anticipate that pullbacks will remain limited and be used by strategic investors to build long-term positions. Based on current conditions, I would not rule out gold retesting its historical highs in the second half of the year, provided U.S. inflation data align with the anticipated monetary easing scenario.