Gold Retreats from Highs as Multiple Headwinds Pressure Precious Metal
Spot gold finished lower on Friday, but the loss could have been worse if it were not for investors who bought the intraday dip to $4536.49. Gold fell victim to a number of factors including profit-taking, the easing of political tensions, a stronger dollar, better-than-expected economic news and Trump’s comments on the next Fed Chairman.
On Friday, XAUUSD settled at $4596.32, down $19.72 or -0.43%.
Profit-Taking Emerges After Failed Rally Attempt
Profit-takers came in early in the session when the market failed to resume the rally after Thursday’s setback. The price action suggested the lack of bids, giving longs an excuse to take profits due to the loss of upside momentum.
Middle East Tensions Ease, Reducing Geopolitical Premium
Bullish traders also blamed a de-escalation of Middle East tensions for dampening the geopolitical premium in gold. According to Reuters, geopolitical tensions appeared to ease as protests in Iran subsided, while U.S. President Trump took a wait-and-see approach. Meanwhile, Russian President Putin offered to mediate in Iran and de-escalate the situation.
Stronger Dollar and Fed Rate Cut Delay Weigh on Gold
A stronger U.S. Dollar also weighed on dollar-denominated gold by making it more expensive for foreign buyers. The dollar rose to a multi-month high on Friday, helped throughout the week by steady U.S. consumer inflation and firm weekly initial claims data. Both economic reports helped change the narrative on the timing of the first Federal Reserve interest rate cut in 2026. According to data compiled by LSEG, traders now expect the Fed to keep interest rates unchanged throughout the first half of the year, with a first 25-basis-point cut projected in June, Reuters reported.
Technical Outlook Remains Bullish Despite Pullback
Technically, the main trend is up according to the daily swing chart. A trade through the record high at $4642.97 will signal a resumption of the uptrend. There is no resistance but the consensus target is $5000.
Gold Price Forecast
Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Gold forecastsThe nearest potential support is a minor 50% level at $4525.40. A second potential support level comes in at $4458.49.
Trend line support, which has been guiding the market higher since October 28 comes in at $4379.43. The major trend indicator is the 50-day moving average at $4287.16.
Buy the Dip Strategy Remains Intact
Looking ahead, a relative calm in the Middle East could encourage speculators to take profits again as they trim the geopolitical premium further. This would also discourage traders from chasing the market higher and encourage them to wait for a pullback into support or a value level like $4525.40 and $4458.49.
With XAUUSD decisively over both the trendline at $4379.43 and the 50-day moving average at $4287.16, traders should continue to be in “buy the dip” mode.
More Information in our Economic Calendar.
