Gold holds steady, heading for a third weekly gain as traders weigh Middle East developments and US inflation data
Softer US Dollar supports prices, though upside momentum remains limited amid the Fed’s higher-for-longer interest rate outlook.
Technically, XAU/USD consolidates within a rising channel below the 200-SMA on the 4-hour chart.
Gold (XAU/USD) holds steady on Friday but lacks strong upside momentum as markets continue to monitor the evolving situation in the Middle East, while traders digest the latest US inflation data. At the time of writing, XAU/USD is trading around $4,775 and is on track for a third straight weekly gain.
Data released by the US Bureau of Labor Statistics showed a clear impact of higher energy costs, with inflation coming in line with expectations. The Consumer Price Index (CPI) rose 0.9% MoM in March, accelerating sharply from 0.3% in the previous month. Annual inflation increased to 3.3% YoY from 2.4% in February.
However, the data failed to provide support to the US Dollar (USD), which remains under pressure amid a modest improvement in risk sentiment. This, in turn, is supporting XAU/USD and helping limit the downside.
US President Donald Trump told NBC News on Thursday that he was “very optimistic” a peace deal with Iran was within reach following the two-week ceasefire agreement. Meanwhile, Israeli Prime Minister Benjamin Netanyahu said his country would begin direct talks with Lebanon “as soon as possible.”
These developments have helped ease earlier concerns about the durability of the ceasefire. However, tensions remain elevated as Israeli strikes continue in Lebanon, keeping markets cautious ahead of upcoming US-Iran negotiations in Pakistan.
Against this backdrop, Gold's price action remains driven by geopolitical headlines and shifting expectations for Federal Reserve (Fed) interest rates.
Fed policymakers have repeatedly highlighted that both sides of the dual mandate are at risk, with the disinflation process slowing while labor market conditions show signs of strain. In this context, Oil-driven inflation is likely to keep the Fed on hold in the coming months, unless a meaningful breakthrough in US-Iran talks leads to a sustained decline in Oil prices.
Technical analysis: XAU/USD consolidates within a rising channel
From a technical perspective, the 4-hour chart shows XAU/USD trading within an upward-sloping parallel channel, forming a series of higher highs and higher lows since bottoming near the $4,100 March swing low.
However, price action reflects a neutral-to-capped near-term tone, as the pair trades below the 200-period Simple Moving Average (SMA) at $4,876 while holding above the 100-period SMA at $4,608.
The Relative Strength Index (RSI) around 57 hints at mildly positive momentum, yet the Moving Average Convergence Divergence (MACD) line remains below the signal line and above zero, with negative histogram bars holding, reinforcing a consolidative phase within the rising channel.
On the topside, immediate resistance is defined first by the 200-period SMA at $4,878, with a break higher opening the way toward the channel’s upper boundary near $5,000 as the next significant supply zone.
On the downside, initial demand emerges around the channel bottom at $4,700, which guards more substantive support at the 100-period SMA at $4,608. A sustained move below the latter would weaken the broader constructive channel narrative and expose deeper losses, while holding above these supports would keep the current consolidation phase intact inside the rising structure.
(The technical analysis of this story was written with the help of an AI tool.)
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