$5,050 and Waiting: Gold’s Next Move Hinges on Payrolls—and a Lawsuit

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Summary:

Gold (XAU/USD) is holding above $5,050 as crumbling US Retail Sales data forces a radical repricing of dovish Fed bets, dragging the Dollar to two-week lows.

BUY XAUUSD

EXP

TRADING

5095.00

Entry Price

5600.00

4780.00

5084.19 +59.03 +1.17%

0.0

Pips

Flat

4780.00

Exit Price

5095.00

Entry Price

5600.00

In a market desperately starved of directional conviction, Gold is scripting a narrative of quiet defiance. XAU/USD is clinging to modest intraday gains north of the $5,050 threshold as European traders take the reins, yet beneath the placid chart lies a battlefield of competing macro forces that could dictate the trajectory of bullion for the remainder of the first quarter.

Make no mistake: the macro wind is firmly at gold’s back. The US Dollar—that great arbiter of non-yielding asset fate—is languishing at a nearly two-week trough, its recent swagger eviscerated by a sudden and violent repricing of Federal Reserve expectations. Money markets are now pricing an astonishing 58 basis points of easing in 2026 alone, a seismic shift from just weeks ago. The catalyst? Tuesday’s US Retail Sales report was a veritable cold shower for growth optimists .

Headline sales printed at 0.0% month-on-month. Let that sink in. Against consensus forecasts of a 0.4% gain, and following November’s robust 0.6% holiday-fueled surge, the American consumer appears to have finally blinked . The breakdown is uglier than the headline suggests. Auto dealers, furniture stores, electronics retailers—discretionary pillars all—reported outright contractions. Even the ubiquitous American bar and restaurant saw a fractional dip of 0.1%. As Chris Zaccarelli of Northlight Asset Management aptly put it, consumer spending has finally caught up with consumer sentiment, “and not in a good way” .

This is the type of data that shifts central bank paradigms. The softness predates the extreme cold snaps of January, suggesting a structural cooling rather than a weather-related blip. Consequently, economists are ripping up Q4 GDP models, and the “higher-for-longer” mantra is rapidly being replaced by “how many cuts by June?” .

Yet, if you think this is merely a story about weakening economic data, you are missing the elephant in the Federal Open Market Committee room. The dollar’s malaise—and by extension, gold’s resilience—is increasingly being fueled by a constitutional crisis unfolding at the Marriner S. Eccles Building.

President Donald Trump’s weekend declaration that he might sue his own Fed chair nominee, Kevin Warsh, if interest rates are not lowered has sent shockwaves through the community of central bank watchers. But the situation escalated far beyond rhetoric on Tuesday. In an unprecedented legal salvo, Fed Governor Lisa Cook has filed suit against the administration challenging her attempted removal . Her legal team is bluntly describing the move as a “broadside attack on the century-old independence of the Federal Reserve System” .

While the White House cites unproven pre-confirmation mortgage allegations as cause, the market is not buying it. The lawsuit explicitly frames the firing as “pretextual,” arguing the true motive is to vacate a seat to stack the Board with officials willing to drive rates toward the President’s desired 1.3% level . The implications are staggering. If the courts side with the administration, the concept of a politically insulated central bank—a bedrock of modern finance—is effectively dead.

Adding to the policy cacophony, Fed Governor nominee Stephen Miran stated this week that “100% central bank independence is impossible.” This is not a dog whistle; it is a foghorn. Against this backdrop, the ostensibly hawkish comments from Dallas Fed’s Lorie Logan and Cleveland’s Beth Hammack feel like background noise. Both noted that policy is likely “very close to neutral,” and Hammack suggested rates could be on hold for “quite some time” . But who is listening? When the executive branch is actively suing to replace sitting governors, a neutral policy stance offers little sanctuary for USD bulls.

So, with a weakening dollar, crashing rate expectations, and a constitutional standoff at the central bank, why isn’t gold screaming toward $5,100?

The answer lies in positioning and geopolitics. Prudent traders are exhibiting rare restraint. Today’s US Nonfarm Payrolls report—delayed but not diminished—looms as a critical inflection point . Consensus is circling a lukewarm 68k to 70k print. A figure south of 50k would validate the retail sales narrative and likely ignite the next leg higher. Conversely, a resilience surprise would give the dollar hawks a lifeline they desperately need.

Furthermore, the geopolitical bid is showing signs of fraying at the edges. While oil prices climb on fragile US-Iran negotiations and the specter of tanker seizures in the Strait of Hormuz, the initial panic has subsided . Markets are beginning to price a “no war” premium out of the barrel, and safe-haven demand for gold is correspondingly ebbing.

Technical Analysis

From a technical perspective, Gold remains firmly embedded in a well-established bullish structure on the 4-hour chart. Price action continues to respect a rising trendline that has guided the market higher since late summer, reflecting persistent demand on dips and a pattern of higher highs and higher lows.

Recently, bullion staged an aggressive impulsive rally that carried price into the $5,350–$5,450 resistance region, an area that previously acted as a supply zone. The sharp rejection from that level triggered a volatile but ultimately constructive pullback, with price rebounding strongly before retesting former breakout territory. This behavior suggests the decline was corrective rather than the start of a trend reversal.

Gold is now consolidating just beneath near-term resistance around $5,100–$5,200, which aligns with a prior breakout shelf and represents the first major barrier bulls must clear to resume the broader advance. The series of higher lows forming above the ascending trendline — currently intersecting near the $4,750–$4,800 zone — reinforces the underlying bullish bias. This trendline acts as dynamic support and continues to attract buying interest on retracements.

A decisive breakdown below $4,750 would be the first technical warning sign of structural deterioration. Such a move would expose the $4,600 horizontal support area, which marked the base of the previous consolidation before the most recent leg higher. A sustained move beneath that region would shift the outlook from bullish continuation to a broader corrective phase, potentially targeting the $4,400 zone.

On the upside, bulls are focused on a sustained break above $5,200. A firm push through this ceiling would confirm that buyers have regained control after the recent shakeout and would likely trigger momentum-driven flows. The next upside objective would be a retest of the $5,400–$5,450 swing high region. A successful breakout there would mark a continuation of the primary uptrend and open the door toward the $5,800–$6,000 psychological region, as suggested by the projected path on the chart.

Price compression just below resistance, combined with the preservation of higher lows, indicates bullish accumulation rather than distribution. The market appears to be building energy for another expansion move, with the broader trend favoring continuation to the upside as long as the ascending support structure remains intact.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: $5,095

STOP LOSS: $4,780

TAKE PROFIT: $5,600

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$5,050 and Waiting: Gold’s Next Move Hinges on Payrolls—and a Lawsuit

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