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05.02.202618:25 Forex Analysis & Reviews: XAU/USD: Analysis and Forecast

Relevance up to 11:00 2026-02-06 UTC--5

Exchange Rates 05.02.2026 analysis

Gold remains on a downward trajectory amid mixed fundamental factors. U.S. dollar strength is a key barrier to further gains in the precious metal. At the same time, an agreement between Iran and the United States to hold talks in Oman on Friday has reduced geopolitical escalation risks, while a decline in gold consumption in China in 2025 is further constraining the upward potential of the asset.

According to a state association, gold consumption in China fell by 3.57% in 2025 to 950.096 metric tons. Meanwhile, domestic gold production increased by 1.09% year over year, reaching 381.339 metric tons.

Supporters of a U.S. dollar rally are refraining from aggressive long positions due to expectations of interest rate cuts by the Federal Reserve, reinforced by a weak Automatic Data Processing (ADP) report on Wednesday and negative U.S. labor market data released today.

Donald Trump's appointment of Kevin Warsh as Chairman of the Federal Reserve strengthened expectations of a less dovish central bank policy, giving the dollar positive momentum.

However, Trump clarified that he would withdraw Warsh's nomination if he supported rate hikes and expressed confidence that the Federal Reserve would inevitably cut rates.

In addition, the market continues to price in two additional borrowing cost cuts in 2026, a view reinforced by disappointing U.S. private-sector employment data released on Wednesday.

This has allowed gold to avoid a sharp sell-off. Geopolitical tensions are also helping to limit declines in the safe-haven asset. Under these conditions, it is advisable to wait for a sustained acceleration in selling before opening positions aimed at a prolonged correction from the all-time high.

From a technical perspective, yesterday's drop below the psychological 5,000 level and today's continuation of the decline favor bears. However, oscillators on the daily chart remain positive, and the MACD histogram moving lower below the signal line indicates that downward momentum is weakening. Therefore, if prices hold above the 4,800 level and the 20-day SMA, bulls will retain a chance to stay in control of the market.

If prices fall below these levels, bears will take control of the situation.

*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2026
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