Gold bulls retain control near multi-month peak amid Fed rate cut bets

Gold price catches fresh bids on Friday and builds on over a one-month-old uptrend.
Worries about a fresh wave of global trade wars underpin the safe-haven commodity.
Bets for more Fed rate cuts weigh on the USD and further benefit the XAU/USD pair.

Gold price (XAU/USD) resumes its uptrend following the previous day’s modest slide, and a subsequent bounce, and climbs to its highest level since October 31 during the Asian session on Friday. The US Treasury bond yields edge lower in reaction to US President Donald Trump’s comments, saying that he would rather not have to use tariffs on China. This, along with the prospects for further policy easing by the Federal Reserve (Fed), drags the US Dollar (USD) to a fresh monthly low, which, in turn, is seen benefiting the non-yielding yellow metal.

Furthermore, investors remain concerned about the potential economic fallout from Trump’s protectionist policies. This turns out to be another factor driving flows towards the safe-haven Gold price. That said, the underlying bullish tone around the equity markets might hold back traders from placing fresh bullish bets around the XAU/USD amid slightly overbought conditions on short-term charts. Nevertheless, the commodity remains on track to register gains for the fourth straight week as traders look to the flash global PMIs for short-term opportunities.

Gold price draws support from Trump’s rate cut calls and a weaker US Dollar

Investors remain concerned about the potential economic fallout from US President Donald Trump’s tariffs, which continues to push the safe-haven Gold price higher on Friday.
The US Dollar slides back closer to the monthly trough in reaction to Trump’s remarks on Thursday that he will apply pressure on the Federal Reserve to bring down interest rates.
The markets started pricing in the possibility that the US central bank will lower borrowing costs twice by the end of this year amid signs of abating inflationary pressures in the US.
Trump said on Friday that his conversation with Chinese President Xi Jinping was friendly and that he could reach a trade deal with China and would rather not use tariffs.
This eases worries that Trump’s protectionist policies could boost inflation and supports prospects for further policy easing by the Fed, benefiting the non-yielding yellow metal.
Traders now look forward to the flash PMIs for fresh insight into the global economic health, which might influence the broader risk sentiment and drive the XAU/USD.

Gold price could pause for breather near all-time peak, ahead of $2,800 mark

From a technical perspective, the emergence of some dip-buying on Thursday and the subsequent move up validate a bullish breakout through the $2,720-2,725 supply zone. That said, the Relative Strength Index (RSI) on the daily chart has moved on the verge of breaking into overbought territory, making it prudent to wait for some near-term consolidation or a modest pullback before positioning for further gains. Hence, some follow-through momentum is more likely to confront a stiff hurdle near the all-time peak, around the $2,790 region.

On the flip side, immediate support is pegged near the $2,760-2,758 area, below which the Gold price could slide to retest the overnight swing low, around the $2,736-2,735 region. Any further slide could be seen as a buying opportunity and remain limited near the $2,725-2,720 resistance-turned-support. The latter should act as a key pivotal point, which if broken decisively might shift the bias in favor of bearish trades and pave the way for deeper losses.