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When the Dollar Depreciates, Gold Tends to Rise, Enabling Investors and Central Banks to Diversify Their Assets in Turbulent Times
Gold (XAU/USD) retreats modestly on Tuesday (January 13, 2026) following the release of December’s inflation data in the US. The precious metal gains momentum as traders firm up bets on US interest rate cuts after the release of inflation data.
XAU/USD Price
Gold price rises to around $4,600 during the early Asian session on Wednesday (January 14, 2026). Traders will take more cues from the US Retail Sales and Producer Price Index (PPI) data later in the day.
The recent US Consumer Price Index (CPI) inflation report provides some support to the yellow metal as core CPI fell short of analyst expectations. It has raised the chances of the US Federal Reserve (Fed) continuing to cut interest rates this year.
Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
Gold Price Influencing Factors
Uncertainty surrounds the US central bank amid renewed threats by the US President Donald Trump administration. The Islamic Republic’s security forces have cracked down on large-scale demonstrations. It left hundreds of people dead, according to the report.
The government has cut off Internet access in Iran, which made it difficult to verify the severity of the situation. Trump has repeatedly threatened to intervene if the government kills protesters.
Donald Trump also announced tariffs of 25% on countries that do business with Iran, exerting pressure on China and Russia, two of Iran’s trading partners.
Gold Price Forecast
Bullish momentum is fading as depicted by the Relative Strength Index (RSI), which turned slightly flat near overbought territory, but failed to record a higher high.
For a bullish continuation, Gold should clear $4,650. On the other hand, if XAU drops below $4,550, this could provide confidence to the sellers to push prices back toward the $4,500 intraday low. The $4,400 threshold is emerging as the next key downside target.
Final Thoughts
Gold has played a key role in human history as it has been widely used as a store of value and medium of exchange. The yellow metal has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets.
The US Retail Sales and PPI data will take center stage on Wednesday. These reports could offer some hints about the US interest rate path. Any signs of higher inflation in the US could boost the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.