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Gold (XAUUSD) is climbing steadily toward the $5,000 level as geopolitical tensions escalate. A renewed trade dispute between the US and EU has triggered safe-haven inflows. President Trump’s push to acquire Greenland and his tariff threats have unsettled markets. In response, European leaders warned of countermeasures and began repositioning U.S. assets. Meanwhile, a weakening Dollar and political uncertainty in Washington are adding fuel to the rally. These overlapping risks continue to drive strong demand for gold.

Gold Strengthens on US–EU Trade Frictions and Safe-Haven Demand
 

Gold is pushing toward the $5,000 level as geopolitical tensions intensify and safe-haven demand accelerates. Tensions between the United States and the European Union have emerged as a key catalyst behind the rally. President Donald Trump’s renewed push to acquire Greenland has sparked a fresh trade dispute, marked by threats of new tariffs on eight European nations. He outlined plans for a 10% levy beginning February 1, with a potential increase to 25% by June if no agreement is reached. This development has unsettled markets and deepened concerns over the stability of US-EU relations.

In response, European leaders moved quickly, with Brussels signaling plans to implement countermeasures if needed. Analysts also pointed to the EU’s large holdings of U.S. assets, valued at around $10 trillion, as a possible tool for economic pressure. Adding to the tension, a major Danish pension fund announced it would sell $100 million worth of U.S. Treasuries, citing concerns over America’s worsening fiscal outlook. These actions have increased doubts about U.S. credit stability and further boosted demand for gold as a safe-haven asset.

Meanwhile, gold continues to draw support from a weak U.S. Dollar and growing political uncertainty in Washington. The Dollar Index remains near two-week lows, while concerns grow over President Trump’s efforts to remove Fed Governor Lisa Cook. With limited U.S. economic data this week, attention has shifted to Thursday’s delayed PCE inflation and third-quarter GDP reports. In the meantime, headlines from Davos and ongoing political developments are likely to influence sentiment and keep gold’s safe-haven appeal firmly in focus.

Gold Tests Upper Wedge Boundary as Bullish Momentum Expands
 

The gold chart below shows a powerful uptrend contained within an ascending broadening wedge. This pattern, outlined by two diverging red trendlines, reflects expanding price swings and rising volatility over time. Price action has steadily moved higher, reaching the upper boundary of the wedge near $4,850. This structure indicates persistent bullish momentum with growing breakout potential if the top resistance line is breached decisively.
 

Since early 2024, a long-term rising support trendline has anchored gold’s broader uptrend from lower levels. This trendline provided a reliable base, with each pullback forming higher lows and finding support along the line. Its repeated validation highlighted steady buying interest during consolidation phases. By late 2025, the uptrend accelerated, pushing gold sharply higher and driving price action toward the upper boundary of the ascending broadening wedge.

As of early 2026, gold is trading near the top of the broadening formation with a strong bullish breakout in progress. The recent surge in price reflects increased safe-haven demand and macro pressures, pushing the market into overextended territory. If gold breaks above the wedge’s upper resistance, it could trigger an accelerated rally. Conversely, short-term pullbacks toward the midline or lower wedge boundary remain possible, but the broader trend still favors the upside.

Gold Forecast: Rising Volatility and Dollar Weakness Support Further Gains
 

Gold remains in a strong uptrend as geopolitical risks, fiscal concerns, and technical momentum continue to support its advance. Escalating US–EU tensions, renewed tariff threats, and signs of economic retaliation have unsettled markets and driven capital into safe-haven assets. At the same time, Dollar weakness and political instability in Washington are amplifying the move. With price action pressing against key resistance, gold appears poised for a potential breakout toward the $5,000 level. 

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