Gold hits record above $4,900 as rally extends despite risk-on mood

NEW YORK (January 22) Gold (XAU/USD) surges for the fourth consecutive trading day on Thursday, hitting a fresh record high of $4,906, even as risk appetite improved and tensions between the US and Europe eased, following an agreement over Greenland. At the time of writing, XAU/USD trades at $4,903, up 1.60% in the day.

Gold climbs for a fourth straight day as lingering policy uncertainty and easing expectations support demand

Market mood is positive following conversations between US President Donald Trump and NATO Secretary General Mark Rutte in Switzerland. Following the meeting, Trump dropped the threats of tariffs imposed on eight European countries effective on February 1.

Aside from geopolitical tensions, US economic data showed that the economy fares better than expected. Gross Domestic Product for the third quarter exceeded estimates. At the same time, the labor market shows signs of stability rather than weakness, as pointed out by Federal Reserve (Fed) officials. Therefore, expectations for a rate cut in the January 27-28 meeting are already priced out.

Other data revealed that the Fed’s preferred inflation gauge steadied, yet it remains far from the Fed’s 2% goal.

All in all, money markets are still expecting 41 basis points of easing towards the end of the year, according to Prime Market Terminal data. As better-than-expected US economic data was released, traders continued to trim dovish Fed bets.

What’s on the US economic docket on January 23?

The schedule will feature S&P Global Flash PMIs and the University of Michigan Consumer Sentiment final reading for January.

Daily digest market movers: Gold traders ignore solid US data

• The US Department of Commerce revealed that the Fed’s favorite inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, rose by 2.7% YoY in October, and by 2.8% in November, as expected.
• The US Bureau of Economic Analysis reported that Q3 2025 GDP expanded by 4.4% YoY, beating expectations of 4.3% and the Q2 reading of 3.8%. Growth was underpinned by stronger exports and a smaller drag from inventories.
• At the same time, figures from the US Department of Labor showed continued resilience. Initial Jobless Claims for the week ending January 17 rose to 200K, slightly above the upwardly revised 199K prior reading, but still below forecasts of 212K.
• A Reuters survey showed that most economists expect the Fed to pause its easing cycle in the January meeting. The poll revealed that most economists do not expect further easing as long as Fed Chair Jerome Powell leads the central bank.
• Regarding geopolitics, the Danish Prime Minister Mette Frederiksen said that regarding Greenland, “we can discuss our agreement on defense with the US.” Earlier, Greenland PM Jens-Frederik Nielsen said that Greenland continues to take the security in the Arctic seriously and choose the Greenland we know today, as part of the Kingdom of Denmark.
• When asked about the US Golden Dome, Nielsen said “I’m sure we can work out something that benefits all of us.”
• US Treasury yields remained steady, yet Gold has continued its rally. The US 10-year Treasury note is flat at 4.251%. At the same time, the US Dollar Index (DXY), which tracks the American currency's performance versus six peers, plummets 0.47% to 98.32.

FXStreet