Gold (XAUUSD) Price Forecast: Bullish Bias Holds Above 50-Day MA Despite Fed Pressure
The dollar index fell 0.4% intraday on Friday but remains up 0.6% for the week, buoyed by hotter-than-expected U.S. data. June retail sales surprised to the upside, and initial jobless claims declined to a three-month low. These readings reinforce the view that the U.S. economy remains resilient, reducing urgency for Federal Reserve rate cuts.
Market expectations for Fed easing have pared back, with traders now pricing in around 45 basis points of cuts for the rest of the year—down from 50 basis points earlier in the week. That’s pressured gold’s appeal as a non-yielding asset, limiting its upside even with the dollar’s recent softness.
Geopolitical Risk from EU Sanctions on Russia Offers Floor to Prices
Gold’s safe-haven demand remains underpinned by geopolitical tensions. The European Union’s approval of its 18th sanctions package against Russia—targeting its oil and energy sectors—reminds traders that conflict-driven uncertainty is far from over. Such risks may help put a floor under gold, even if upside remains capped near-term.
Bond Yields Ease but Not Enough to Break Bullion Higher
U.S. Treasury yields drifted lower Friday, with the 10-year yield down 3.8 basis points to 4.425%. However, the decline was too modest to materially boost gold. Traders are also awaiting July’s University of Michigan Consumer Sentiment and housing data, both potential catalysts for fresh market direction.