• Gold outlook remains strong after rallying to multi-week highs.
• The Fed’s dovish turn weighs on the yields, supporting the bullion.
• Geopolitical uncertainty and broader demand for gold keep the downside limited.

Gold price trades with a solid footing on Friday’s European session, hovering near the highest level since late October. The mild pullback occurred in the Asian session, reflecting a slight improvement in global risk appetite for equities. However, the broader backdrop remains constructive for the metal, as the Fed maintains a dovish stance, while geopolitical uncertainties provide steady support for the bullion.

The Fed’s recent 25 bps rate cut, the third in 2025, remains a key catalyst behind the recent gold rally. The central bank not only reduced the rates but also signaled labor market vulnerabilities, which markets interpreted as a sign of further cuts in 2026. The shift has pushed the US dollar to 2-month lows, but it experienced a slight recovery on Friday.

Fed Chair Powell emphasized avoiding overtightening, increasing expectations that the policy cycle has finally turned, supporting the non-yielding gold. Falling US yields have reduced the opportunity cost of holding the gold, helping the yellow metal to break out of a two-week consolidation and post solid gains.

On the geopolitical front, the stalled Russia-Ukraine peace negotiations, coupled with renewed tensions, have made investors cautious despite a rise in equity markets. White House comments revealing deteriorating prospects in talks have increased the uncertainty.

Overall, gold appears poised to post substantial weekly gains as dovish central-bank expectations and geopolitical tensions overshadow temporary pressure from stronger equity markets and a minor dollar rebound.
 

Gold Key Events Ahead

With limited US data on the calendar for Friday, gold’s immediate direction is likely to be driven by FOMC speakers and broader market sentiment. Investors will monitor remarks from key Fed officials for clues on whether the central bank is prepared to accelerate its easing cycle should labour-market conditions weaken further. In the absence of surprises, the path of least resistance for gold remains to the upside, with dips expected to attract fresh buying interest.
 

Gold Technical Outlook: Key MAs Pointing at Further Gains
 

(Click on image to enlarge)

Gold 4-hour chart
 

Gold’s 4-hour chart shows a bullish crossover of 20 and 50-period MAs, while other key moving averages, stacking one above another, reflect a strong uptrend. However, the RSI holds near the overbought region, indicating a potential consolidation before further upside.

The key resistance levels for gold emerge at $4,300, ahead of $4,340, and then at all-time highs near $4,400. On the other hand, key support lies at $4,250 ahead of $4,200 and then $4,170.

More By This Author: