Gold extends the range play below $5,200 amid hawkish Fed signals, geopolitical tensions
By Haresh Menghani
Date Published: 27 Feb 2026 | Date Modified: 27 Feb 2026
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Gold (XAU/USD) struggles to build on its modest gains from the past two days. It extends its sideways consolidative price move below the $5,200 mark through the Asian session on Friday. Geopolitical risks remain in play amid a large American naval and air power buildup in the Middle East.
- Gold consolidates in a narrow range below the $5,200 mark during the Asian session.
- Geopolitical risks and trade uncertainties continue to act as a tailwind for the XAU/USD.
- Reduced Fed rate cut bets offer support to the USD and cap the non-yielding commodity.
Gold (XAU/USD) struggles to build on its modest gains from the past two days. It extends its sideways consolidative price move below the $5,200 mark through the Asian session on Friday. Geopolitical risks remain in play amid a large American naval and air power buildup in the Middle East. US President Donald Trump laid out the case for a possible attack on Iran in his State of the Union speech. He also said on Tuesday that he would not allow the world's biggest sponsor of terrorism to have a nuclear weapon. Persistent trade-related uncertainties also act as a tailwind for the precious metal.
The US moved ahead with a 10% tariff on all non-exempt goods, the rate initially announced by Trump on Friday, following the Supreme Court verdict against his sweeping tariffs rather than the 15% he promised a day later. However, a White House official said the administration is working to raise levies to 15%, fueling worries about retaliatory measures and the economic fallout from disruptions to global supply chains. Given Trump's mercurial turns over tariffs, the anxiety over how long this rate will continue keeps investors on edge and turns out to be another factor that underpins the traditional safe-haven Gold.
Meanwhile, traders trimmed their bets for more aggressive policy easing by the US Federal Reserve (Fed) after minutes from the January FOMC meeting showed that the central bank is in no hurry to cut interest rates further. Moreover, officials discussed the possibility of raising rates if inflation does not cool. This keeps the US Dollar (USD) well within striking distance of the monthly peak and caps the upside for the non-yielding Gold. Furthermore, the US and Iran agreed to more nuclear talks, easing concerns about potential hostilities. This contributes to keeping a lid on the commodity and warrants caution for bulls.
The market focus now shifts to the release of the US Producer Price Index (PPI), due later during the North American session. Apart from this, speeches by influential FOMC members will play a key role in driving the USD demand and providing some impetus to the Gold heading into the weekend. Nevertheless, the XAU/USD pair remains on track to register gains for the fourth week in a row, and the broader fundamental backdrop suggests that any corrective pullback is more likely to be bought into.
XAU/USD 1-hour chart
Gold needs to find acceptance above $5,200 mark to back the case for further gains
The range-bound price action witnessed over the past three days or so constitutes the formation of a rectangle pattern on intraday charts. Meanwhile, the Gold holds above the rising 100-hour Simple Moving Average (SMA) near $5,176, keeping the short-term uptrend structure intact despite repeated intraday pullbacks. The Relative Strength Index (RSI) hovers just below 50, reflecting balanced momentum but not signaling downside pressure. The Moving Average Convergence Divergence (MACD) indicator remains slightly above the zero line, with the MACD line still over the signal line, which reinforces a modest upside tone rather than a momentum-driven rally.
Initial resistance emerges at the recent hourly highs around $5,195, where prior advances stalled, and intraday sellers reappeared. A convincing break above this barrier would open the way toward the next upside area near $5,210, where the latest upward leg would begin to look extended. On the downside, immediate support stands at the 100-hour SMA around $5,176, with a sustained drop below this level exposing deeper support at $5,165, aligned with recent closing lows and the lower end of the latest consolidation band.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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