Gold (XAU/USD) gained further traction in Asian trading on Friday, climbing above the $3,650 level and holding close to its all-time highs. This rebound follows Thursday’s bounce from the $3,613 support area, underpinned by dovish Federal Reserve expectations and persistent geopolitical tensions.
Fed Rate Cuts and Weak USD Boost Gold
Fresh U.S. data reinforced the case for a more aggressive policy easing cycle by the Federal Reserve. Jobless claims surged to their highest since October 2021, adding to last week’s weak Nonfarm Payrolls report. Despite inflation data surprising to the upside, the market is now fully pricing in three Fed rate cuts this year, with the first expected at the September FOMC meeting.
As a result, the U.S. Dollar Index slipped to its weakest level since late July, while the yield on the 10-year U.S. Treasury dropped to a five-month low. This combination boosted gold’s safe-haven appeal, driving XAU/USD back toward record highs.
Geopolitical Tensions Reinforce Safe-Haven Demand
Gold’s rally is further fueled by political and trade-related risks:
- France’s Prime Minister resigned following a no-confidence vote, while Japan faces political instability.
- Rising U.S.–China–India trade tensions, as Washington pushes G7 allies to increase tariffs, add to global uncertainty.
- NATO risk escalated after Poland intercepted Russian drones in its airspace, marking a significant development in the Ukraine conflict.
- Ongoing Middle East conflicts continue to bolster safe-haven flows.
These factors highlight why gold remains resilient despite a risk-on mood in equities, with Wall Street indices posting record highs.
Technical Outlook: Bulls Eye $3,700
From a technical perspective, gold remains firmly bullish, though overbought RSI levels suggest caution.
- Immediate Resistance: $3,657–$3,675 (recent peak)
- Major Resistance: $3,700 round number
- Immediate Support: $3,630 intraday low
- Key Support: $3,600 psychological level, followed by $3,580 and $3,560
As long as gold holds above $3,600, the path of least resistance remains upward. A break above $3,675 could open the door for a move toward $3,700–$3,713 in the near term.
✅ Summary: Gold’s bullish momentum remains intact above $3,650, fueled by Fed rate cut bets, USD weakness, and heightened geopolitical risks. While short-term pullbacks are possible, the broader trend favors further gains toward the $3,700 level.
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