Gold sticks to positive bias above $5,000; bulls seem hesitant as focus remains on US data

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Gold (XAU/USD) sticks to its positive bias for the third straight day on Friday, though it lacks follow-trough amid the mixed fundamental backdrop.

Gold attracts some buyers for the third straight day, though the upside seems limited.
Rising geopolitical tensions act as a tailwind for the commodity ahead of the US data.
Receding Fed rate cut bets continue to underpin the USD and cap the precious metal.

Gold (XAU/USD) sticks to its positive bias for the third straight day on Friday, though it lacks follow-trough amid the mixed fundamental backdrop.

Moreover, traders opt to wait for the key US macro releases – the Advance Q4 GDP report and the Personal Consumption Expenditures (PCE) Price Index – before placing fresh directional bets. The crucial data will play a key role in influencing expectations about the US Federal Reserve's (Fed) rate cut path. This, in turn, will drive the US Dollar (USD) and provide some meaningful impetus to the non-yielding yellow metal.

US President Donald Trump warned Iran on Thursday that it must make a deal over its nuclear program, or really bad things will happen, and set a deadline of 10 to 15 days. In response, Iran told UN Secretary-General, Antonio Guterres, that it does not seek war but will not tolerate military aggression. Iran added that all bases and assets of a hostile force in the region would be legitimate targets if attacked. This raises the risk of a military confrontation and a broader conflict in the Middle East, which continue to underpin the safe-haven Gold and remains supportive of the modest uptick on the last day of the week.

Meanwhile, Minutes from the January FOMC monetary policy meeting showed that the central bank is in no hurry to cut interest rates further, while officials also discussed the possibility of raising rates if inflation does not cool. Moreover, the incoming data signaled a remarkably resilient US labor market, which, along with hawkish comments from Fed officials, forced investors to pare their bets for more aggressive policy easing. The market repricing of Fed rate cuts, in turn, pushed the USD to its highest level since January 23 and cap any further appreciation for the Gold, warranting caution for bulls.

XAU/USD 1-hour chart

Gold bulls have the upper hand above 100-hour SMA; break through trading range hurdle awaited

The XAU/USD pair on Thursday defended and bounced off the 100-hour Simple Moving Average (SMA) resistance-turned-support. That said, the lack of follow-through buying and the range-bound price action witnessed over the past two days or so warrants caution for bullish traders. The SMA currently sits at $4,965.41, offering nearby dynamic support.

Meanwhile, the Moving Average Convergence Divergence (MACD) line remains below the Signal line and below zero, while the negative histogram contracts, hinting at fading bearish pressure. The Relative Strength Index (RSI) stands at 53 (neutral), aligning with a tentative recovery tone.

Holding above the rising 100-period SMA would keep intraday risks skewed to the upside, and a MACD bull crossover with a drive back above the zero line would strengthen the case for continuation. Conversely, a loss of momentum on MACD alongside an RSI rollover from the mid-50s would leave the recovery vulnerable and could see price retest the moving average as support before direction reasserts.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Core Personal Consumption Expenditures - Price Index (YoY)

The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures." Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

Why it matters to traders?

After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed’s forward guidance and vice versa.