Gold (XAU/USD) staged a solid comeback on Friday, bouncing back from early-session losses to trade above the critical $3,300 level. After dropping to the $3,275–$3,280 range in the Asian session, buyers re-entered the market amid growing geopolitical concerns and strong technical support. However, gold’s gains capped by improving global trade sentiment and the Federal Reserve’s hawkish stance, which bolstered the US Dollar and limited the upside in the non-yielding metal.
Gold rebounds above $3,300.
Gold found strong buying interest around the $3,275 level, reversing early losses. As dip-buyers stepped in, XAU/USD recovered and reclaimed $3,300, a key psychological mark. The bounce suggests continued demand for gold amid market uncertainty and technical support. Despite a stronger USD, the safe-haven appeal of gold remains intact due to persistent geopolitical instability.
Safe-haven demand drives recovery
Heightened global tensions fueled renewed interest in gold. Reports of renewed clashes between Russia and Ukraine during a temporary ceasefire, cross-border skirmishes between India and Pakistan, and the flare-up of conflict between Israel and Iran-backed Houthis in Yemen all contributed to safe-haven flows. Investors turned to gold to hedge against escalating risks, helping it regain strength after the initial drop.
US-UK trade deal caps gains
The announcement of a limited US-UK trade deal sparked optimism in global markets. Although the agreement retained a 10% tariff on British imports, it marked a step forward for transatlantic trade. Moreover The resulting improvement in risk appetite slightly reduced the need for safety plays like gold. However, the deal’s limited scope prevented a full-blown rally in equities, which helped gold maintain its footing.
US-China tariff cut hopes weigh on gold
In addition to the UK deal, market optimism was further lifted by reports that the US may reduce tariffs on Chinese imports from 145% to 50%. This move is expected to be discussed during high-level meetings between US and Chinese officials in Switzerland. Easing trade tensions typically encourage risk-taking, reducing demand for safe-haven assets like gold. These developments have contributed to keeping gold gains modest.
Hawkish Fed strengthens US Dollar
The Federal Reserve left interest rates unchanged but made it clear that rate cuts are not imminent. This hawkish pause boosted the US Dollar to a four-week high, creating a headwind for XAU. A stronger dollar makes gold more expensive for international buyers and reduces its appeal as an alternative investment. The Fed’s cautious tone reflected concerns over inflation resilience, adding pressure on gold prices.
Fed speeches could shift momentum
Market participants are now focusing on speeches from key FOMC members expected later in the day. Any dovish surprises could weaken the US Dollar and support gold. Conversely, if Fed officials reinforce their hawkish message, gold could face renewed selling pressure. Furthermore These speeches may also provide clues about the Fed’s stance on inflation, economic slowdown risks, and future rate paths — all critical factors for gold traders.
Gold Technical support holds firm
Technically, XAU found strong support near $3,275 and reclaimed ground above $3,300, suggesting that buyers are defending key levels. Immediate resistance is seen near $3,320–$3,330, followed by a more significant hurdle at $3,360. On the downside, a break below $3,275 could expose $3,250. Price action suggests that XAU remains range-bound, with direction likely to depend on headlines and upcoming data.
First weekly gain in three weeks
XAU appears on track to post a modest weekly gain after two consecutive weeks of losses. The bounce reflects a rebalancing between bearish drivers like a stronger USD and bullish ones like geopolitical risk. While the gain may be limited, it could mark a turning point if risks continue to rise or the Fed adopts a more flexible tone. Investors remain cautious but willing to accumulate gold on dips.
Mixed market sentiment persists
Investor sentiment is split between optimism over easing trade tensions and caution over growing geopolitical instability. While trade deal hopes are fueling risk appetite in equities, persistent global conflict is keeping demand for XAU alive. This tug-of-war has led to choppy trading conditions and sideways movement in gold. Traders are hedging bets, reflecting the lack of clear conviction on either side.
Gold outlook hinges on data and headlines
The near-term outlook for gold depends on a combination of economic data, central bank commentary, and geopolitical developments. Upcoming US inflation and job reports will guide Fed expectations. At the same time, fresh headlines from Ukraine, the Middle East, or US-China negotiations could shift sentiment quickly. Traders should remain alert as the balance between risk sentiment and safe-haven flows continues to shape gold’s direction.
