Gold Price Forecast: XAU/USD soars on geopolitical tensions, dovish Fed rate cut speculation

Source Fxstreet
  • Gold's rally fueled by increased geopolitical risks in the Red Sea region and a shift towards risk-averse trading.
  • US Producer Price Index data falls short of expectations, bolstering speculation of imminent Fed policy easing.
  • Decline in US Treasury yields and a mixed Dollar performance further support Gold's upward momentum.

Gold price rallied sharply on Friday, spurred by a risk-off impulse due to tensions arising around the Red Sea, as the US and the UK retaliated against Houthi's attack on a US ship on Thursday. Therefore, XAU/USD’s refreshed five-day highs at around $2062, and trades at $2045, up 0.70%.

XAU/USD hits five-day high at $2062, sponsored by mixed US data, increased odds for Fed rate cuts

Traders bought Gold due to the escalation of the conflict in the Middle East. Besides that, the yellow metal was boosted by the drop in US Treasury bond yields, as bets that the US Federal Reserve would cut rates aggressively beginning as soon as March increased.

In the meantime, the latest inflation report in the United States (US), revealed that prices paid by producers, also known as the PPI, slid below estimates, with the PPI monthly dropping -0.1%, below forecasts of 0.1%. In a year-over-year number, the PPI rose by 1%, below forecasts of 1.9%. Core PPI was unchanged at 0% compared with November’s data but below estimates, while year-over-year figures dipped below projections and the previous reading, from 2% to 1.8%.

Although today’s data is supportive of a dovish approach by the Fed, on Thursday consumer inflation data was higher than expected. It should be said that some Fed officials made comments on December’s data, and pushed back against expectations for a rate cut in March.

The yellow metal was also supported by the drop in US yields, particularly the short-end of the curve, with the 2-year Treasury note plunging almost ten basis points to 4.16%, reducing the US 2s-10s yield curve inversion. That weighed on the Greenback, which according to the US Dollar Index (DXY) clings to decent gains of 0.15%, up at 102.47.

XAU/USD Price Analysis: Technical outlook

Gold’s daily chart remains upward-biased after bouncing off the weekly lows of $2013, which exacerbated XAU’s rally toward the $2060 area, before sliding toward the 20-day moving average (DMA) at $2046. If buyers crack that level and the $2050 figure, that could open the door to retesting weekly highs. Further upside is seen at $2100. On the flip side, XAU/USD’s buyers' failure to reclaim $2050 could open the door for further losses. First support is seen at today’s low of $2028, followed by the week’s low of $2013.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
The dollar weakened, equities dipped, and gold hit record highsThe dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
Author  Cryptopolitan
Sep 17, 2025
The dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
placeholder
ECB Policy Outlook for 2026: What It Could Mean for the Euro’s Next MoveWith the ECB likely holding rates steady at 2.15% and the Fed potentially extending cuts into 2026, EUR/USD may test 1.20 if Eurozone growth proves resilient, but weaker growth and an ECB pivot could pull the pair back toward 1.13 and potentially 1.10.
Author  Mitrade
Dec 26, 2025
With the ECB likely holding rates steady at 2.15% and the Fed potentially extending cuts into 2026, EUR/USD may test 1.20 if Eurozone growth proves resilient, but weaker growth and an ECB pivot could pull the pair back toward 1.13 and potentially 1.10.
placeholder
Silver Price Forecast: XAG/USD consolidates above $79.00; bearish bias intact ahead of FedSilver (XAG/USD) lacks a firm intraday direction and oscillates in a narrow range during the Asian session on Wednesday as traders opt to wait on the sidelines ahead of the crucial FOMC rate decision.
Author  FXStreet
Mar 18, Wed
Silver (XAG/USD) lacks a firm intraday direction and oscillates in a narrow range during the Asian session on Wednesday as traders opt to wait on the sidelines ahead of the crucial FOMC rate decision.
placeholder
Gold falls below $4,850 as Fed holds rates steadyGold price (XAU/USD) faces some selling pressure near $4,830 during the early Asian session on Thursday.
Author  FXStreet
Yesterday 01: 59
Gold price (XAU/USD) faces some selling pressure near $4,830 during the early Asian session on Thursday.
placeholder
Gold tumbles below $4,650 as inflation fears and liquidity squeeze weighGold price (XAU/USD) remains under selling pressure near $4,640 during the early Asian session on Friday. The precious metal extends the decline as soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears.
Author  FXStreet
6 hours ago
Gold price (XAU/USD) remains under selling pressure near $4,640 during the early Asian session on Friday. The precious metal extends the decline as soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears.
Related Instrument
goTop
quote