Gold (XAUUSD): Bearish or Bullish? Gold Faces a Crossroads

If you followed the levels we laid out in November, you’ve likely seen solid gains as XAU has risen nearly 6% since then. Gold has now reached our targeted area for wave B, sitting comfortably at the 88.2% Fibonacci level ($2,755) and reclaiming the trendline at $2,720 with ease. From our perspective, a downturn in the near future would make more sense, leading to a drop to at least $2,420 per ounce—an area we highlighted in our last analysis.

The macro backdrop adds complexity. On his first day in office, the 47th U.S. President signed over 200 executive orders, sending shockwaves through the markets. Among these actions, President Trump suggested a 10% tariff on Chinese imports starting February 1, alongside potential tariffs on European imports. These moves could strengthen the US dollar, which would typically dampen gold’s appeal as a hedge against inflation while boosting its attractiveness in other scenarios.

If gold continues higher, our count allows for a maximum target of $2,886. Should it exceed this level, we would need to re-evaluate our outlook. For now, we maintain a bearish near-term perspective while monitoring key levels closely.

Key Levels:
Support Levels: $2,720, $2,528 & $2,328
Fibonacci Levels: $2,859–$2,887