Gold price (XAU/USD) continues its upward momentum, reaching a fresh weekly peak around the $2,773-$2,774 level during the European session on Thursday. Despite the Federal Reserve’s (Fed) firm stance on interest rates, uncertainty surrounding US economic policies has caused a dip in Treasury bond yields. This shift puts pressure on the US Dollar (USD), increasing demand for gold as a safe-haven asset.
In addition to this, ongoing concerns about the economic impact of US trade tariffs further support gold prices. However, the Federal Reserve has indicated no immediate rate cuts, which provides some strength to the US Dollar. Traders remain cautious ahead of the Advance US Q4 GDP report due later in the day.
Gold Price Rises as US Bond Yields Decline
On Wednesday, the Federal Reserve decided to keep interest rates unchanged, emphasizing that any future adjustments would depend on inflation and job market data. Fed Chair Jerome Powell reassured that political influences would not impact rate decisions, reinforcing the idea that rates will stay elevated longer than expected.
The US 10-year Treasury bond yield struggled to maintain its recent bounce, limiting the US Dollar’s strength and supporting gold prices. Investors are also wary of economic risks from US trade tariffs, further driving demand for gold. Additionally, the European Central Bank’s (ECB) monetary policy decision on Thursday could introduce volatility in financial markets, affecting XAU/USD movements.
Looking ahead, traders are eyeing the US Personal Consumption Expenditures (PCE) Price Index on Friday, a crucial inflation metric closely monitored by the Federal Reserve.
Gold Price Targets Multi-Month High at $2,786
From a technical perspective, gold’s recent breakout past the $2,720-$2,725 resistance zone, coupled with strong daily chart indicators, supports a bullish outlook. However, a decisive break above the $2,772-$2,773 resistance level is essential before the price advances toward $2,786, its highest point since October 2024. A sustained rally could push gold beyond $2,790, with further momentum potentially leading to a breach of the $2,800 threshold.
On the downside, if gold prices decline below the $2,745-$2,744 region, buyers may re-enter the market near the $2,730 support level. If this support fails, further declines toward $2,707-$2,705 could occur, with a potential drop to the $2,684 zone.
Conclusion
Gold prices remain strong despite uncertainties in US monetary policy and trade conditions. The upcoming US GDP report and PCE inflation data will be critical in shaping gold’s next move. Investors should stay informed about market trends through reliable sources.
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