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Gold's Record Rally Tests $5,300 Amid Fed Anticipation
On January 28, 2026, gold prices surged nearly 2%, pushing the metal to test the $5,300 per ounce level. This sharp move coincided with a weakening US dollar ahead of the Federal Reserve's FOMC meeting scheduled for 6 PM GMT, followed by Chair Jerome Powell's speech at 6:30 PM GMT. The rally lifted sentiment across the broader metals market, driving gains in shares of major mining companies including Newmont Corp, Barrick Gold, and AngloGold Ashanti.
Technical Indicators Signal Overbought Conditions
Daily charts show gold's RSI indicator climbing to around 88, indicating extreme overbought territory. Historical data reveals a similar RSI peak of 90 in October 2025, which preceded a sharp correction. Despite this, the current rally marks the strongest 20-session gain in over 26 years, underscoring unprecedented momentum.
The weakening dollar stems from market expectations around the Fed's policy stance. Traders anticipate signals on interest rate cuts amid cooling inflation and robust economic data. Gold, as a non-yielding asset, thrives in low-rate environments, attracting safe-haven flows during uncertainty.
Broader Market Context and Historical Benchmarks
This surge builds on gold's stellar 2025 performance, where it gained over 30% year-to-date by late December. Factors included geopolitical tensions, central bank buyingled by China and Indiaand persistent inflation fears. Entering 2026, gold started strong, breaking $5,000 in early January before consolidating.
Today's move aligns with recent equity market volatility. The S&P 500 rose 1.16% to 6,875.62 on January 21, marking its largest one-day gain since November 2025 and snapping a two-day losing streak. It remains 1.46% below its record close of 6,977.27 on January 12. Similarly, the DJIA climbed 1.21% to 49,077.23, off 1.03% from its peak of 49,590.20.
These index gains reflect optimism post-inauguration, with the S&P up 14.66% from January 20, 2025's close and 18.90% from Election Day 2024 levels. Yet, gold's appeal persists as a hedge against equity risks and currency devaluation.
Impact on Mining Sector and Global Investors
Mining stocks reacted swiftly: Newmont Corp shares rose over 3%, Barrick Gold gained 2.5%, and AngloGold Ashanti surged 4% in early trading. This sector lift extends to silver and platinum, with silver testing $35 per ounce. Institutional investors, including ETFs like GLD, saw inflows exceeding $2 billion last week.
For portfolio managers, gold's role has evolved. Traditionally a diversifier, it now comprises 5-10% of balanced funds amid rising trade frictions. Recent data shows the Global Economic and Trade Friction Index at 101 in November 2025, with the US, EU, and South Korea leading.
- Gold's 20-day gain: Strongest in 26 years
- RSI at 88: Extreme overbought
- S&P 500 YTD: +0.44% as of Jan 21
- DJIA YTD: +2.11%
Fed Meeting Implications and Future Outlook
The FOMC decision could pivot markets. A dovish tone might propel gold past $5,400, while hawkish surprises could trigger profit-taking. Analysts eye Powell's comments on tariffsannounced April 2025, boosting S&P 21.24% sinceand their inflationary impact.
Long-term, central bank reserves remain bullish. China's holdings hit 2,300 tonnes in 2025, per World Gold Council estimates. Retail demand from Asia supports prices, with premiums at 5% over spot in India.
Risks include a stronger dollar if Fed signals fewer cuts, or equity rallies drawing capital away. Yet, with global growth slowingSMEs face high uncertaintygold's safe-haven status endures.
This $5,300 test marks a milestone, potentially setting new highs if Fed aligns with easing expectations. Investors watch closely as metals reshape portfolios in 2026.