By: Economy Middle east

Gold prices steadied below the record $4,600 per ounce mark on Tuesday, as investors engaged in profit-taking following a sharp rally to new highs. Spot gold hovered around levels seen early in the session, reflecting a pause after Monday’s surge driven by geopolitical risks and U.S. policy uncertainties. This consolidation comes after gold hit fresh peaks above $4,629, underscoring its role as a safe-haven asset amid ongoing global tensions. 

Recent price action

Spot gold traded at $4,595.08 early Tuesday, with buyers pausing after the previous session’s rally to $4,630. U.S. gold futures for February delivery had settled higher at around $4,614 the prior day, but profit booking led to a flat open at $4,602.29. 

In the UAE, gold rates dipped on Tuesday, with 24-carat, 22-carat, and 21-carat gold falling by AED1.75 to AED554.00, AED513.00, and AED491.75, respectively. Meanwhile, 18-carat gold decreased by AED1.50, bringing it to AED421.50.

The metal’s pullback aligns with typical behavior after rapid gains, where traders lock in profits near psychological barriers. Gold had jumped 2.2 percent to $4,609 on Monday before peaking higher, fueled by a rush into non-yielding assets. Silver followed a similar pattern, up 0.22 percent to $85.35/oz after its own record, while platinum and palladium also advanced.

Key drivers behind the rally and pause

Escalating concerns over Federal Reserve independence, sparked by tensions between President Donald Trump and Chair Jerome Powell, propelled the recent surge. A reported criminal investigation into Powell by the Trump administration amplified political risk, weakening the U.S. dollar and boosting gold’s appeal. Geopolitical uncertainties, including trade tensions and regional conflicts, further supported safe-haven flows, with analysts noting “elevated uncertainties” playing directly into the gold market. 

Profit booking emerged as the primary counterforce on January 13, with investors cashing in after gold’s record-setting run. HSBC projected potential upside to $5,000/oz by mid-2026 on sustained risks and debt concerns, but short-term consolidation allows for breathing room. A weakening dollar and lower yields from expected Fed cuts continue to underpin prices, though stronger U.S. growth could cap gains. 

Broader 2026 outlook

Gold’s 2025 performance exceeded 60 percent gains with over 50 all-time highs, setting a high bar for 2026 amid persistent macro tailwinds. Central bank buying, tight supply, and ETF inflows support forecasts up to $5,300/oz, though reflation risks under Trump policies could trigger a 20 percent correction to $3,360. Upside scenarios tied to Fed rate cuts and “doom loop” growth slowdowns could add 15-30 percent.