Gold held onto modest intraday gains on Friday, rebounding from a brief decline to the $3,275–$3,274 range. Renewed safe-haven demand, sparked by intensifying geopolitical tensions across Ukraine, the Middle East, and the India-Pakistan border, helped buoy the metal. Additionally, a modest pullback in the US Dollar (USD) from its recent one-month high offered further support.
While the rebound helped snap a two-day losing streak, upside potential remains capped amid broader market optimism over US-UK trade agreements and the resumption of US-China trade negotiations over the weekend. These developments, coupled with the Federal Reserve’s hawkish pause, suggest that any extended USD weakness—and by extension, significant gold rally—may be limited in the short term.
Key Market Drivers
Geopolitical Unrest: Continued violence in Ukraine despite a ceasefire, growing instability in Yemen involving Iran-backed Houthis, and rising India-Pakistan tensions are driving safe-haven flows into gold.
US Dollar Movement: The USD slipped after touching a four-week high earlier in the Asian session, offering a tailwind to non-yielding assets like gold.
Trade Developments:
The US and UK announced a limited bilateral deal, maintaining a 10% tariff on UK imports.
The US is reportedly considering reducing tariffs on Chinese goods from 145% to 50%, feeding market optimism.
US Treasury and trade officials are set to meet with Chinese counterparts in Switzerland this weekend.
Federal Reserve Stance: The Fed remains reluctant to cut interest rates despite economic uncertainty. Markets await comments from key FOMC members later Friday for additional policy signals.
Technical Outlook
Support Levels
Immediate support lies in the $3,265–$3,264 region.
A breach below could open the door to $3,223–$3,222, and possibly the $3,200 swing low from last week.
Resistance Levels
Initial resistance is at $3,324, followed by the critical $3,360–$3,365 zone.
A decisive break above could drive the price toward $3,400, with a further target near the $3,434–$3,435 weekly high.
Despite a bearish tilt due to the recent breakdown below $3,300 and $3,260, technical indicators are not fully aligned with a negative bias, suggesting that further downside may require confirmation through sustained selling.
Conclusion
Gold remains underpinned by geopolitical fears and a softening USD, but resistance at $3,360–$3,365 could keep further gains in check unless macro developments provide a stronger catalyst. Investors should watch upcoming Fed commentary and US-China trade talks for the next directional cues.
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