Gold Advances But Remains On Track For Weekly Decline

Gold price (XAU/USD) recovers its recent losses from the previous session on Friday. The yellow metal advances as the broader precious metals market rebounds on safe-haven demand. However, the yellow metal is on track for its first weekly decline in five weeks as escalating Middle East tensions push oil prices higher, fueling inflation concerns and reducing bets on Federal Reserve rate cuts.

The dollar-denominated Gold faces challenges as the US Dollar (USD) strengthens, as Federal Reserve (Fed) officials continue to consider the possibility of further rate hikes if inflation remains above target. It is worth noting that a weaker US Dollar makes the precious metal cheaper for buyers with foreign currencies, boosting demand.

The US-Israeli conflict with Iran entered its seventh day, with Iran launching missiles and drones across the Gulf on Thursday, striking an oil refinery in Bahrain, while Israel continued airstrikes on Tehran, and the US suspended operations at its embassy in Kuwait.

US President Donald Trump said that Iranian officials reached out to him in an attempt to reach an agreement to end the war, but he insisted it was too late and that the US is pushing to destroy Iran.

Iranian Foreign Minister Abbas Araghchi said Tehran has not sought a ceasefire and has no intention of negotiating, while Iran’s Islamic Revolutionary Guard Corps warned that retaliatory strikes would intensify in the coming days.

Traders await US labor data, including US Nonfarm Payrolls (NFP), where consensus expectations are around 59K for February, following January’s above-trend reading of 130K. Additionally, Retail Sales are expected to fall 0.3% month-over-month in January, after a flat reading in the previous month.

The US is also set to introduce a temporary 15% global tariff this week, replacing the 10% rate enacted after the Supreme Court of the United States struck down most of the earlier levies imposed by Donald Trump. Scott Bessent said the tariff could revert to previous levels within five months as new trade investigations move forward.

Gold tests nine-day EMA barrier near $5,150

Gold price (XAU/USD) is trading around $5,130 at the time of writing. The technical analysis of the daily chart suggests an ongoing bullish bias as the metal price remains within the ascending channel pattern.

The near-term bias is mildly bullish as price holds above the rising 50-day Exponential Moving Average (EMA) and continues to respect the cluster of recent highs rather than extending the prior correction. The nine-day EMA flattens just above the spot, indicating moderating but still bearish short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) at 53 stays above its midline, showing underlying buying pressure remains intact.

The XAU/USD pair is testing the immediate barrier at the nine-day EMA of $5,140. A break above the short-term average and support the pair to approach the upper boundary of the ascending channel at $5,480, followed by the all-time high of $5,598, reached on January 29. On the downside, the initial support lies at the lower boundary of the channel at $5,080. A break below the channel would expose the 50-day EMA at $4,883.

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