Dollar Dynamics and Fed Outlook Remain Supportive

The US dollar staged a mild rebound from its weakest level since early October, though the move lacked follow-through. Expectations that the Federal Reserve will maintain a broadly accommodative policy stance continue to cap the dollar’s upside, reducing the appeal of yield-sensitive assets.

This environment remains constructive for gold, which benefits when real rates stay compressed and currency strength remains constrained. As a result, the metal has shown resilience despite short-term dollar firmness, with no signs of aggressive profit-taking emerging near recent highs.

Geopolitical Uncertainty Sustains Safe-Haven Demand

Ongoing geopolitical tensions continue to underpin safe-haven flows into bullion. Elevated uncertainty across multiple regions has encouraged investors to retain defensive exposure, reinforcing the view that the latest pullback reflects consolidation rather than a shift in trend.

Focus Turns to Key Japanese Data

With holiday-thinned markets reopening, attention will turn to upcoming Japanese economic releases on Friday. Tokyo core CPI is expected to slow to 2.5% year on year from 2.8%, while the unemployment rate is forecast to hold at 2.6%. Industrial production is seen falling 1.9% after a prior gain, and retail sales growth is projected to ease to 0.9%.

Weaker-than-expected data could add to global growth concerns, potentially reinforcing gold’s appeal as a defensive asset.

Short-Term Forecast

Gold near $4,479 targets $4,520 while holding $4,450 support; silver at $71.85 eyes $73.80, with $70.20 support limiting downside as markets reopen amid holiday-thinned liquidity and steady safe-haven demand outlook.