Gold (XAU/USD) erased modest Asian session losses on Friday and hovered just below the $3,750 level, nearly unchanged on the day. The yellow metal remains supported by expectations of further US Federal Reserve (Fed) rate cuts, ongoing geopolitical tensions, and renewed tariff concerns.
Fed outlook, tariffs and geopolitics keep gold underpinned
Markets are increasingly confident that the Fed will lower borrowing costs in October and again in December. This outlook limits the upside momentum of the US Dollar, which recently touched a three-week high, and lends support to non-yielding assets such as gold.
Safe-haven demand has also been reinforced by US President Donald Trump’s announcement of steep tariffs, including a 100% levy on branded pharmaceutical imports, 25% duties on heavy-duty trucks, and 50% tariffs on kitchen cabinets, starting October 1. Rising geopolitical risks further bolster gold’s appeal.
At the same time, robust US data has tempered aggressive bullish bets on the metal. Second-quarter GDP was revised higher to 3.8% from 3.3%, while August durable goods orders climbed 2.9% and jobless claims fell to 218K, underscoring economic resilience despite trade headwinds.
Recent Fed commentary reflects a cautious balance between inflation and growth risks. While some officials warned about policy being overly restrictive, others stressed the need to stay data-dependent. According to the CME FedWatch Tool, markets are pricing an 85% chance of a 25 bps cut in October and just over 60% odds of another reduction in December.
Technical outlook: key levels in play
From a chart perspective, XAU/USD faces immediate resistance at a descending trend line near $3,753–$3,754. A sustained break above this level could open the door to a retest of the all-time high at $3,790, with further upside potential toward the $3,800 mark.
On the downside, the $3,720–$3,715 zone acts as an intraday pivot. A drop below $3,700 could trigger technical selling, exposing support at $3,650 and then $3,610–$3,600.
Traders now await the US core PCE Price Index later on Friday, which could influence Fed expectations and provide fresh direction for gold into the weekend.
