Gold (XAU/USD) remains tilted to the upside for a third consecutive session on Friday, though gains appear restrained amid a mixed fundamental backdrop. Traders are largely staying on the sidelines ahead of key U.S. data releases — the Advance fourth-quarter GDP report and the Personal Consumption Expenditures (PCE) Price Index — before committing to fresh directional positions. These readings are expected to shape expectations for the Federal Reserve’s rate-cut trajectory, which in turn will influence the U.S. dollar and the outlook for the non-yielding yellow metal.
Heightened geopolitical tensions are offering some support. U.S. President Donald Trump warned Iran that it must reach a nuclear agreement within 10 to 15 days or face severe consequences. In response, Iran told UN Secretary-General Antonio Guterres that while it does not seek conflict, it would respond to any military aggression and consider hostile forces’ regional bases legitimate targets. The escalating rhetoric has revived fears of a broader Middle East confrontation, underpinning safe-haven demand for gold and helping sustain its modest advance into the end of the week.
However, upside momentum remains capped by shifting interest-rate expectations. Minutes from the January FOMC meeting indicated policymakers are not in a rush to ease policy further and even discussed the possibility of additional tightening should inflation remain persistent. Strong U.S. labor market data, coupled with hawkish remarks from Fed officials, has prompted investors to scale back expectations for aggressive rate cuts.
This repricing has lifted the U.S. dollar to its highest level since January 23, limiting further gains in gold and suggesting bulls may remain cautious until clearer signals emerge from incoming economic data.
XAU/USD H1 chart
Gold buyers stay in control above the 100-hour SMA; range breakout still pending.
On Thursday, XAU/USD successfully held above the 100-hour Simple Moving Average (SMA), which has shifted from resistance to support, and staged a modest rebound from that level. However, the absence of strong follow-through buying and the largely range-bound movement seen over the past couple of sessions suggest bulls should remain cautious. The 100-hour SMA, currently positioned at $4,965.41, continues to provide nearby dynamic support.
From a momentum standpoint, the Moving Average Convergence Divergence (MACD) remains below both its Signal line and the zero mark, although the narrowing negative histogram points to easing bearish pressure. Meanwhile, the Relative Strength Index (RSI) hovers around 53, reflecting neutral conditions and a tentative recovery bias.
As long as price action stays above the rising 100-period SMA, short-term risks remain tilted to the upside. A bullish MACD crossover accompanied by a move back above the zero line would reinforce the case for further gains. On the other hand, if MACD momentum weakens further and the RSI turns lower from the mid-50 region, the rebound could lose traction, potentially leading to another test of the moving average before a clearer directional move emerges.
Sources: Haresh Menghani
THE ETERNAL SOVEREIGN 
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