Gold drew renewed buying interest after sliding to a weekly low in the previous session. Expectations that the Federal Reserve may adopt a more dovish stance continue to weigh on the US Dollar, offering support to the precious metal. Market participants are now awaiting the latest US consumer inflation data for fresh direction.
Gold (XAU/USD) has pulled back from near the $5,000 psychological level but maintains modest intraday gains heading into Friday’s European trading session. Investors are focused on the upcoming US CPI release, which is expected to provide clearer signals on the Fed’s future policy path. The outcome will likely influence short-term US Dollar dynamics and generate meaningful momentum for the non-yielding metal.
Earlier in the week, a stronger-than-expected US Nonfarm Payrolls report prompted traders to trim expectations for a March rate cut, helping the US Dollar Index (DXY) rebound from a two-week low and contributing to Gold’s pullback. Even so, markets continue to anticipate that the Fed could still deliver two rate cuts in 2026. Meanwhile, softer US Jobless Claims data has limited the Dollar’s upside.
According to the US Department of Labor, initial jobless claims declined to 227K for the week ending February 7, above the 222K forecast but below the previous week’s revised 232K. Continuing Claims rose to 1.862 million for the week ending January 31, underscoring ongoing labor market softness seen over the past year. This underlying weakness provides support for Gold while tempering the Dollar’s strength.
Additionally, a deterioration in global risk sentiment, reflected in broadly weaker equity markets, has boosted demand for safe-haven assets like Gold. However, it remains uncertain whether XAU/USD can extend its gains, as traders may prefer to stay cautious until the key US CPI report is released before initiating fresh positions.
XAU/USD 1-hour chart
Gold’s Mixed Technical Signals Call for Caution
Gold’s technical picture remains conflicted, suggesting aggressive traders should proceed carefully. The overnight break below the weekly trading range initially appeared to give bears the upper hand. However, the absence of sustained follow-through selling and the metal’s resilience beneath the $4,900 level argue against firmly committing to a bearish outlook.
On the momentum front, the MACD has crossed above its Signal line near the zero mark, with the histogram turning positive—an indication that bullish momentum may be gradually building. This shift hints at a possible near-term recovery in price action.
At the same time, the RSI has rebounded from oversold territory and currently sits at 44.72, a neutral reading. While this supports a tentative intraday bounce, the RSI remaining below the 50 threshold suggests that upside attempts could face resistance.
Should the MACD slip back below the Signal line and fall under zero, bearish pressure would likely re-emerge, potentially extending the current consolidation phase. For now, momentum leans modestly supportive as long as the MACD holds above zero and the positive histogram continues to expand. Conversely, a narrowing histogram would signal waning momentum and caution against overconfidence in further gains.
Sources: Haresh Menghani
THE ETERNAL SOVEREIGN 
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