However, the consolidation from October to December 2025 was quick and produced a shorter ascending channel pattern. The short ascending channel pattern indicated a quick move after the break of $4,400.
Therefore, the break from $4,400 has sparked another $1,000/ounce move toward $5,400. However, this time the target of $5,400 was breached, and gold produced a high of $5,600. After hitting this target, the price quickly dropped, producing a historic one-day decline to a low of $4,679.50 on Friday.
This indicates strong volatility and suggests that the correction from $5,600 may introduce another consolidation pattern above the $4,400-$4,600 support. However, a break below $4,400 may introduce further downside to $4,000.
Based on this discussion, the drop on Friday does not change the bullish structural outlook, as long as the price remains above $4,000. Instead, this event indicates a healthy correction before the next surge in gold.
Key Market Signals Supporting the Gold Outlook
US Dollar Bounce Adds Short-Term Uncertainty
The uncertainty in the US dollar market after President Trump appointed the Fed pick is also observed in the US dollar market, as the US dollar produced a low at 95.50 in January 2026 and induced a rebound back towards the resistance of 97.
As per our previous discussion, the US dollar has broken the 96 level, but the rebound from the low of 95.50 during the last day of January 2026 has increased uncertainty.
