Key Moments
- XAU/USD traded back under $5,100 after giving up part of its earlier advance during Friday’s European session.
- Despite heightened Middle East tensions, gold remained on track for a second consecutive weekly decline.
Geopolitical Tensions Support Safe-Haven Interest, But Dollar Strength Dominates
Gold (XAU/USD) surrendered a portion of its modest intraday gains and moved back below the $5,100 level heading into the European session on Friday. The metal continued to trade within the lower end of the range that has contained price action for roughly the past two weeks, after partially retracing losses from the previous two days.
Persistent geopolitical risks in the Middle East underpinned safe-haven appetite. Iran’s new supreme leader, Mojtaba Khamenei, warned in his first public address that all US military facilities in the region must be shut immediately or face attacks. He also stated that operations against US bases in the area would go on, even as Iran maintains its belief in goodwill with its neighbors.
At the same time, US President Donald Trump commented that confronting Iran was a higher priority for him than developments in Oil prices. According to the article, Crude Oil prices have been climbing since the beginning of the US-Israel war on Iran. Concerns about potential supply disruptions due to the closure of the Strait of Hormuz have intensified worries about a jump in inflation.
Fed Rate Cut Expectations Repriced, Lifting Yields and the US Dollar
Fears of an inflation spike tied to energy supply risks have prompted investors to sharply reduce expectations for interest rate cuts by the US Federal Reserve in 2026. This shift in policy outlook has helped keep US Treasury yields elevated.
Higher yields continued to attract capital flows into the US Dollar (USD), limiting the appeal of non-yielding assets such as gold as markets looked ahead to the release of the US Personal Consumption Expenditures (PCE) Price Index.
The upcoming inflation figures are expected to be pivotal for shaping views on the Fed’s future policy stance against a backdrop of mounting anxiety over war-driven price pressures. The data are likely to influence demand for the USD and could provide clearer direction for XAU/USD. Still, traders remained focused primarily on geopolitical headlines.
Despite the support from safe-haven flows, the metal appeared set to log a second consecutive weekly decline. The combination of conflicting drivers – geopolitical risk, shifting Fed expectations, and currency dynamics – suggested the need for caution before adopting aggressive positions in either direction or assuming a sustained move higher.
Technical Picture: Bulls Defend Uptrend, But Bears Retain Near-Term Edge
On the 4-hour chart, gold once again rebounded from the area surrounding the 200-period Exponential Moving Average (EMA), preserving the broader uptrend structure in spite of recent pullbacks. This technical backdrop called for prudence among sellers, as the key dynamic support had yet to give way.
The Moving Average Convergence Divergence (MACD) indicator remained below both its signal line and the zero line. However, the latest narrowing in negative readings pointed more toward a loss of bearish momentum than a fresh downward extension. The Relative Strength Index (RSI) hovered near 44, staying below the 50 midpoint but away from oversold territory, in line with a corrective move inside a longer-term upward bias rather than a completed top.
Immediate support was identified around $5,090, where recent intraday lows aligned just above the 200-period EMA on the 4-hour chart located near $5,039, creating a significant demand zone. A clear break beneath this band would expose deeper downside toward the $5,000 level.
On the upside, initial resistance sat at the recent swing high near $5,160. A sustained move through that barrier could pave the way toward the $5,200 region and then the late-stage peak around $5,230.
A recovery through the $5,160–$5,200 area would likely draw the MACD back toward the zero line and nudge the RSI nearer to 50, confirming a renewed bullish tone. Conversely, a failure to hold the $5,090–$5,039 support cluster would tilt the 4-hour setup toward a more neutral or potentially bearish configuration.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Performance Against Major Currencies This Month
The table below presents this month’s percentage changes in the US Dollar (USD) versus major currencies. Over the period, the USD showed its strongest performance against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.63% | 1.24% | 2.10% | -0.23% | 0.79% | 2.82% | 1.71% | |
| EUR | -2.63% | -1.35% | -0.53% | -2.79% | -1.79% | 0.18% | -0.90% | |
| GBP | -1.24% | 1.35% | 0.87% | -1.46% | -0.44% | 1.55% | 0.46% | |
| JPY | -2.10% | 0.53% | -0.87% | -2.28% | -1.28% | 0.69% | -0.38% | |
| CAD | 0.23% | 2.79% | 1.46% | 2.28% | 1.02% | 3.04% | 1.95% | |
| AUD | -0.79% | 1.79% | 0.44% | 1.28% | -1.02% | 2.01% | 0.91% | |
| NZD | -2.82% | -0.18% | -1.55% | -0.69% | -3.04% | -2.01% | -1.08% | |
| CHF | -1.71% | 0.90% | -0.46% | 0.38% | -1.95% | -0.91% | 1.08% |
The heat map reflects percentage moves among the major currencies. The currency listed on the left serves as the base, while the one at the top is the quote. For instance, choosing the US Dollar in the left-hand column and the Japanese Yen along the top means the value in that cell represents the performance of USD (base) against JPY (quote).
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