- Geopolitical uncertainty is supporting gold, while a stronger US Dollar and firm Fed stance are capping gains.
Gold prices extended their gains for the third consecutive day on Friday, maintaining a positive bias. However, the metal is digesting a mixed set of fundamental factors as it continues to move higher. Gold is up 20 points, or 0.42%, and is trading around $5,021.71 per ounce.
Traders are keenly awaiting key US macroeconomic releases, including the advance Q4 GDP report and the Personal Consumption Expenditures (PCE) Price Index. These data releases are crucial for placing fresh directional bets on the Federal Reserve’s interest rate decision.
Let’s take a technical look at the gold trading chart before discussing the fundamental factors shaping the metal’s price.
Gold Price | Technical Outlook:
The chart shows that the gold price remains in a broader uptrend despite the recent sharp correction from the all-time high near 5,610. Following the strong bullish rally, the price experienced a steep pullback but managed to hold well above the major structural support at 4,393, which now serves as a long-term key floor.
The rejection from the 5,600 zone confirms it as a strong resistance area, while the intermediate resistance stands around 5,145, which aligns with the previous breakout zone. The highlighted green area represents a consolidation range between roughly 4,900 and 5,150. A sustained breakout above 5,145 could open the door for a retest of the 5,600 high. On the downside, a break below 4,900 would weaken the short-term bullish structure and expose the lower support levels.
The MACD indicates fading bearish momentum and a gradual shift toward neutrality. It reflects consolidation rather than a decisive trend move. The RSI is currently around the mid-to-upper 50s, holding above the 50 level. This supports a mild bullish bias. It’s not overbought territory, meaning there is still room for upside.
The Key Fundamentals Shaping Gold Price:
- Rising tensions in the Middle East are supporting gold demand. US President Donald Trump warned Iran to reach a nuclear deal within 10–15 days or face serious consequences.
- Iran responded that it does not seek war but would retaliate against any military aggression, increasing the risk of broader regional conflict.
- Escalating geopolitical risks are boosting safe-haven flows into gold, helping prices stay supported.
- On the monetary policy front, the January FOMC minutes showed that the Federal Reserve is not in a rush to cut interest rates.
- Fed officials also discussed the possibility of raising rates if inflation remains persistent.
- Strong US labor market data and hawkish Fed comments reduced expectations for aggressive rate cuts.
- As a result, the US Dollar strengthened to its highest level since late January, limiting further upside in gold prices.
Rising geopolitical risks increase uncertainty in financial markets, prompting investors to shift toward safe-haven assets like gold, which helps support prices.
The key resistance lies near the upper consolidation zone around 5,145, while support is seen near 4,900; a breakout on either side could determine the next directional trend.
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