Gold consolidates below $5,200 as traders weigh geopolitics, Fed rate outlook

Gold consolidates below $5,200 as traders weigh Middle East tensions against fading Fed interest rate-cut bets.
Technically, XAU/USD holds above key $5,140 support with resistance seen at $5,200-$5,250.
Traders await US PPI data for fresh short-term direction.

Gold (XAU/USD) consolidates with mild losses on Friday, as momentum stalls within this week’s established range. The metal is showing little directional conviction, with traders balancing lingering geopolitical tensions against shifting expectations for the Federal Reserve’s (Fed) monetary policy path.

At the time of writing, XAU/USD is trading around $5,177, as bears continue to defend the $5,200 handle. Despite Friday’s slight retreat, Gold looks set to post a fourth consecutive week of gains.

No news from Geneva

The third round of indirect US-Iran nuclear talks ended in Geneva on Thursday without any meaningful progress, with Washington increasing its military deployment in the region. The possibility of military action remains well alive, supporting safe-haven demand and limiting Gold’s downside.

Iranian Foreign Minister Abbas Araghchi described the latest round of talks as “good.” “These were the most serious and longest talks,” he said, adding that further technical discussions will be held next week in Vienna.

Markets increasingly doubt a Fed rate cut in June

On the monetary policy front, markets are nearly certain that the Fed will keep interest rates unchanged at its March and April meetings, while trimming bets also on a June rate cut as policymakers continue to stress that inflation must show clearer signs of cooling before lowering rates.

This repricing of rate-cut expectations, with a hold now expected also in June, weighs on Gold and lends support to the US Dollar (USD), capping gains in XAU/USD.

Market sentiment has also been dampened by renewed uncertainty surrounding US trade policy. Trade tensions intensified earlier this week after a fresh 10% global tariff took effect, just days after the US Supreme Court ruled against the Trump administration’s earlier use of emergency powers to impose tariffs.

Against this backdrop of fading rate-cut expectations and ongoing Middle East tensions, Gold may continue to trade within a narrow range in the near term. The US Producer Price Index (PPI) data at 13:30 GMT could drive short-term moves in XAU/USD before the trading week ends.

The broader outlook for Gold remains tilted to the upside, with the metal on track for a seventh straight monthly gain, supported by steady central bank buying, solid ETF inflows, and persistent geopolitical and economic uncertainty.

Technical analysis: XAU/USD trades sideways as momentum cools

The near-term bias remains mildly bullish to neutral on the 4-hour chart, as price continues to hold comfortably above the 100-period Simple Moving Average (SMA) near $5,039.

Immediate support is seen around $5,140, aligning closely with the 61.8% Fibonacci retracement at $5,141, measured from the $4,402 low to the the $5,598 all-time high. The 100-period SMA at $5,038 reinforces a stronger support zone beneath. A sustained break below $5,038 could expose the 50% retracement at $5,000 and weaken the current bullish structure.

On the upside, initial resistance is located in the $5,200-$5,250 region, followed by the 78.6% Fibonacci retracement at $5,342. Rejection near $5,342 would suggest fading upside momentum, while a decisive break above this level could open the door toward the $5,598 peak.

The Relative Strength Index (RSI) has eased to 55, retreating from overbought territory above 70, indicating cooling but still positive momentum rather than outright exhaustion.

The Average Directional Index (ADX) around 17 signals a weak trend environment, so upside progress would depend on fresh buying interest rather than strong trend continuation.