Gold Price Holds Near Weekly Low as Fed Dials Back Rate Cut Hopes Despite Geopolitical Risks

Gold Price Pressured Near $3,350 as Fed Dampens Rate Cut Outlook

The Gold price (XAU/USD) continues to decline and trades just below $3,350 in early European hours on Friday, extending a week-long losing streak. The bearish move is largely driven by fading expectations for rate cuts by the US Federal Reserve, which has shifted to a more hawkish stance on future monetary policy.

Key Drivers Behind the Move

Hawkish Fed Overshadows Safe-Haven Demand

• The Fed this week lowered its outlook for interest rate cuts in 2026 and 2027, supporting the US Dollar and weighing on non-yielding assets like gold.
• The stronger greenback makes gold more expensive for holders of other currencies, capping buying interest.

Middle East Geopolitics Fails to Lift Gold

• Despite renewed tensions in the Middle East, including the ongoing Iran-Israel air conflict, gold has not attracted significant safe-haven flows.
• Analysts suggest that market confidence in a controlled escalation may be muting the usual risk-aversion demand for gold.

Equity Market Sentiment Dulls Demand

• A positive risk tone in European equities further limits gold’s upside potential.
• Investors appear to prefer risk-on assets over safe-havens like gold, at least in the short term.

Technical Outlook

• Gold remains vulnerable below the $3,350 mark, with initial support seen around $3,320, followed by $3,280.
• On the upside, any recovery may face resistance near the $3,385–3,400 area.
• The broader outlook remains bearish while XAU/USD stays below its 20-day EMA.

Related Articles on Tredu.com:

• US Dollar Gains on Fed’s Hawkish Pivot: Impact on Gold and Commodities
• Middle East Conflict: Will Safe-Haven Assets Rally or Stall?
• XAU/USD Technical Levels to Watch This Week