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- XAU/USD falls 0.7% to $5,032, set for weekly losses exceeding 2%.
- DXY climbs to 100.43 while US 10-year yield rises near 4.29%.
- US Q4 GDP revised down to 0.7% as Core PCE holds steady at 3.1% YoY.
Gold price loses some 0.70% on Friday. It seems poised to end the week with losses of more than 2% as the Greenback remains the choice for safety amid the Middle East conflict, which has increased investors’ angst over a reacceleration of inflation. Also, a softer-than-expected reading of US growth data increased the chances of a rate cut in 226.
Bullion slips below $5,050 as rising yields, Middle East tensions boost demand for the US Dollar
The XAU/USD trades at $5032 after reaching a daily high of $5,128. The US Dollar Index (DXY), which tracks the performance of the American currency against other peers, is up 0.70% at 100.43 a headwind for Bullion prices.
Growth data from the US revealed an ongoing economic slowdown in the second half of 2025. The Gross Domestic Product (GDP) for Q4 2025, on its second estimate, dipped from 1.4% to 0.7% YoY, according to the US Commerce Department.
At the same time, the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, remained steady at 3.1% YoY in January, unchanged from the previous print, while the headline figure dipped modestly from 2.9% to 2.8% YoY.
Given the backdrop, a stagflationary scenario looms. Standard & Poor’s rating agency warned that Iran’s war could cause lasting supply shocks, leading to lower US GDP growth and higher inflation.
Fed expected to hold rates
US Treasury yields are also soaring, weighing on the precious metals segment. The US 10-year T-note yield rises nearly 2.5 basis points to 4.286%.
Money markets traders had priced in a less dovish Fed; they’re expecting 20 basis points of easing, according to data from the Chicago Board of Trade (CBOT).
Speculation of US price increases is fueled by the ongoing conflict in the Middle East, after WTI prices reached a year-high of $113.00. The price of gasoline at the pump had risen by more than 20%, reaching a high of $3.60 per gallon since the commencement of the conflict two weeks ago.
President Donald Trump said the US will take strong action against Iran next week, after a 30-day waiver for buying sanctioned Russian oil.
Next week US economic docket
Traders are expected to pay close attention to geopolitical events over the weekend, and then shift their focus to the Federal Reserve’s meeting on March 17-18. In addition, they will monitor Industrial Production, housing statistics, the Producer Price Index (PPI), and employment data.
XAU/USD Technical outlook: Gold to challenge $5,000 as key support level
Gold’s technical picture has turned bearish in the near term, with XAU/USD poised to drop below $5,000, which could sponsor a test of the 50-day Simple Moving Average (SMA) at $4,925.
Momentum has shifted bearish, as indicated by the Relative Strength Index (RSI), which has fallen below its 50-neutral level.
With that said, the most likely scenario is downwards. Beneath the 50-day SMA lies the February 17 swing low of $4,841, ahead of the February 6 daily low of $4,655. Conversely, the first area of interest for XAU/USD on the upside would be the $5,050 area, followed by $5,100. Up next lies the next key resistance level, being the March month high at $5,238.
