Gold price (XAU/USD) attracts some sellers to near weekly low during the early European session on Friday. The precious metal remains volatile amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.
Iran’s Foreign Minister Abbas Araghchi said Wednesday that “no tangible progress” has been made in negotiations to end the Middle East war. Araghchi further stated that lines of communication with Washington were still open but warned that any attack by Israel on the Lebanese capital Beirut as part of its campaign against Hezbollah would trigger a “full-scale resumption” of the US-Iran conflict.
While Iran’s Foreign Minister stated that the negotiations had stalled, US President Donald Trump said ceasefire talks are in the “final” stages. On Wednesday, Iran fired missiles and drones at Kuwait and Bahrain, killing one person and injuring dozens at Kuwait’s main airport, after the US struck an oil tanker headed to the Islamic Republic.
A lack of progress in ceasefire talks between the US and Iran after the worst burst of violence in weeks continue to fuel concerns over inflation and expectations of elevated interest rates, which weigh on the Gold price, non-yielding asset.
“Higher inflation expectations, associated with the negative supply shocks, have pushed yields across the curve higher, kept the USD firm, and prompted markets to begin pricing in a Fed hike in late 2026,” said Bart Melek from TD Securities.
The US employment report will take center stage later in the day. The Nonfarm Payrolls (NFP) are expected to show a gain of 85,000 jobs in May, while the Unemployment Rate is projected to remain steady at 4.3% during the same period. Any signs of surprise weakening in the US labour market could undermine the US Dollar (USD) and support the USD-denominated commodity price in the near term.
XAU/USD daily chart
Gold keeps the bearish vibe in near term
In the daily chart, XAU/USD holds in a bearish near-term bias as price sits under the 100-day Moving Average and below the Bollinger Bands middle line, keeping the broader downswing intact. The Relative Strength Index (RSI) at 40 is weak but not oversold, suggesting sellers retain control while still allowing room for further downside before exhaustion signals emerge.
On the topside, initial resistance is located at the Bollinger Bands middle band around $4,545, with the upper band near $4,715 and the 100-day MA at $4,795 forming a wider cap if a rebound extends. On the downside, the first notable support is the lower Bollinger band at roughly $4,370; a clear break beneath this zone would open the door to a deeper retracement, while holding above it would hint at scope for consolidation within the current bearish structure.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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