Gold (XAU/USD) is holding steady at $3,324 on Friday after dipping from recent highs at $3,368. This is the third week in a row of gains for the metal, driven by ongoing geopolitical uncertainty and macroeconomic caution. The latest boost in sentiment comes after US President Donald Trump said trade talks with China are active, despite China’s denial.
A Chinese commerce ministry spokesperson said the US must lift unilateral tariffs if it’s serious about resolving the dispute. These tensions have kept gold’s appeal as a hedge against political risk and market volatility, especially with cooling inflation and falling yields.
So far in 2025, gold has gained over $700 and hit multiple all-time highs, as high as $3,500 this week.
Fed Outlook, Rate Cuts Fuel Gold
Beyond trade, the Fed is a major driver of gold. Policymakers are in no hurry to change the current rate stance and are waiting for more clarity on how Trump’s tariff policies impact inflation and labor market trends.
According to market pricing, traders expect 84 bps of rate cuts by end 2025—good for non-yielding assets like gold which tend to outperform in low rate environment. As IG strategist Yeap Jun Rong says, “Even if positioning is crowded, structural tailwinds remain intact, especially with emerging markets diversifying their reserves.”
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YTD Gain: +$700
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High This Week: $3,500.05
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Expected Rate Cuts: 84 bps by 2025-end
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Fed Stance: Cautious, no near-term change
Gold Tests Key Support
From a technical perspective, gold is at a crossroads. After pulling back from $3,368, the price is testing the trendline and 50-period EMA ($3,340)—a confluence that could spark more upside if support holds.
MACD is flattening after a bearish crossover, so be cautious. But if gold holds at $3,320 and prints a bullish candle, we could see $3,368 or $3,414 in the next few days. Below $3,270 and momentum weakens.
Trade:
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Buy: On bounce from $3,320
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Targets: $3,368 and $3,414
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Stop: Below $3,270
Be patient—wait for confirmation at support. Trendline test without volume or follow-through is a premature entry.
