XAU/USD surges to $2,600 on risk-off sentiment; AUD/USD gains on RBA outlook

Gold (XAU/USD) experienced extreme volatility, briefly touching $2,600 before settling around $2,580, up 1.2% as geopolitical tensions and economic uncertainty fueled safe-haven demand. The precious metal's surge coincided with reports of Trump-Schumer shutdown negotiations and China-UK diplomatic developments. Meanwhile, AUD/USD strengthened 0.4% to 0.6285 as major banks MUFG and CBA forecast a February RBA rate hike, citing persistent inflation concerns. Goldman Sachs and Deutsche Bank expect the RBA to hold rates next week, creating mixed signals for the Australian dollar. Chinese property shares jumped on regulatory easing reports, potentially supporting risk sentiment in Asian markets. The Reserve Bank of India is expected to maintain rates at 5.25% according to Reuters polls, with focus shifting to liquidity management and rupee stability. Gold's technical picture shows strong resistance at $2,600 with support at $2,550.