Gold Steadies Above $4,900 as Markets Navigate Post-Jobs Data Volatility and Friday’s CPI Release

Sentiment: Cautiously Bullish

Gold is trading in a consolidation range between $4,900 and $5,100, with the precious metal demonstrating remarkable resilience following late January’s violent correction. The yellow metal’s swift recovery from the $4,400 lows to current levels near $4,950 indicates strong underlying demand and suggests the worst of the Warsh-induced selloff may be behind us. Technical indicators present a mixed picture: the 14-day Relative Strength Index (RSI) sits neutrally around 58, whilst the Moving Average Convergence Divergence (MACD) oscillates near the zero line showing no clear momentum. Money Flow Index (MFI) has turned downward from upper boundaries, indicating some capital outflows, but the Volume-Weighted Average Price (VWAP) and 20-day Simple Moving Average remain below current prices, maintaining a bullish bias.

Major investment banks remain constructive on gold’s medium-term prospects despite near-term volatility. J.P. Morgan Global Research forecasts gold averaging $5,055 per ounce by Q4 2026, rising toward $5,400 by end-2027. Wells Fargo’s recent forecast of $6,100–$6,300 aligns with Fibonacci extension analysis suggesting gold has substantial room to run in this secular bull market. UBS targets $6,200, whilst Deutsche Bank sees $6,000. Goldman Sachs recently raised its forecast to $5,400 from $4,900. These projections rest on expectations of continued strong investor and central bank demand averaging around 585 tonnes quarterly.

Friday’s CPI release represents the next major catalyst. If inflation rises faster than anticipated, incoming Fed Chair Warsh will face pressure to maintain higher rates for longer, potentially capping gold’s upside. Conversely, softer inflation data would reinforce expectations for multiple Fed cuts in 2026, likely propelling gold back above $5,000 and toward retesting the $5,400–$5,600 resistance zone. Current consensus expects core CPI (excluding food and energy) to remain sticky, limiting the Fed’s flexibility.

Changes to Weekly Outlook:

Previous Week Assessment: Bearish to neutral, with gold struggling to hold $4,500 following the historic crash and testing critical support levels.

Current Week Shift: Upgraded to cautiously bullish. Gold has demonstrated impressive resilience, recovering nearly all of late-January’s losses and establishing firm support above $4,900. Key changes include:

• Technical Recovery: Price has reclaimed the psychological $5,000 level multiple times and formed a series of higher lows from the $4,404 bottom, indicating renewed accumulation.
• Institutional Support: Major banks have either maintained or raised their 2026 forecasts despite recent volatility, with Wells Fargo specifically recommending buying the pullback.
• Sentiment Stabilisation: Initial panic selling has subsided; markets have absorbed the Warsh appointment and are now focusing on fundamental economic data.
• Chinese Demand Recovery: Shanghai Gold Exchange withdrawals totalled 126 tonnes in January, whilst Chinese gold ETFs added RMB44 billion ($6.2 billion, 38 tonnes) in the month—the strongest start to a year on record.

The weekly outlook now anticipates range-bound trading between $4,900–$5,200 ahead of Friday’s CPI, with a breakout above $5,100 on softer inflation data opening the path toward $5,400. Support at $4,900 appears increasingly solid.