XAU/USD Soars with Support from Geopolitical Tensions and Fed Rate Cut Outlook

Gold intensifies gains during Tuesday’s Asian trading session, reaching its weekly high as investors seek refuge in safe-haven assets. The price dynamics reflect the convergence between increasing international instability and dovish expectations from the US Federal Reserve, creating a favorable scenario for the precious metal.

Fundamental Factors Support Bullish Pressure on Gold Price

Geopolitical tensions once again dominate the flow of capital into safe assets. Announcements of possible US military operations in Venezuela, territorial conflicts between regional powers in the Middle East, and the prolonged war between Russia and Ukraine keep investors cautious. In this context, gold strengthens its position as a store of value.

At the same time, the market prices in two additional rate cuts by the Federal Reserve still in 2025. Mixed economic activity data released on Monday — with the S&P Global manufacturing PMI steady at 51.8 (continuous expansion), while the ISM indicator fell to 47.9 (contraction) — reinforce the dovish narrative without dampening expectations of cost reductions.

Pressure on the US dollar intensifies amid concerns over the institutional independence of the Federal Reserve under the new administration. This directly benefits the XAU/USD quote, as gold does not yield interest and its attractiveness increases when the USD weakens.

Technically, Precious Metal Advances with Positive Momentum Signals

From a technical perspective, breaking above the 100-hour Simple Moving Average marks a significant inflection point. The MACD histogram has turned positive and slightly moved above the signal line near zero, indicating an incipient improvement in buying momentum.

The Relative Strength Index (RSI) stands at 68 — close to overbought territory but still with room for appreciation. Movement above 70 would strengthen the bullish scenario; failure at this test could result in temporary consolidation.

With the price remaining above the 100-hour SMA (dynamic support at $4,373.28), declines are likely to be superficial. Breaking the resistance zone between $4,445 and $4,450 would serve as a critical trigger for extending gains.

Weekly Agenda Defines Next Moves for Gold

The US non-farm employment report (NFP) on Friday is the main catalyst for new directions in the gold price used as a market reference. This indicator will provide clarity on the pace of rate cuts by the Fed and will drive significant movements in both the dollar and the XAU/USD in the short term.

Until then, investors will monitor other macroeconomic releases of the week. The convergence of safe-haven demand, expectations of accommodative monetary policy, and dollar weakening support a constructive scenario for the asset in the coming days.