Weekly Gold (XAU/USD)
The dollar’s strength compounded the pressure on gold. The U.S. dollar index advanced for the fourth consecutive week, driven by economic data that showed ongoing labor market resilience. Lower-than-expected jobless claims reinforced expectations that the Fed may not need to accelerate rate cuts, boosting the greenback and making gold more expensive for international buyers.
Geopolitical Tensions Offer Limited Support
Despite economic headwinds, geopolitical uncertainties have provided gold with intermittent support. Heightened tensions in Eastern Europe and the Middle East, including Israeli airstrikes and ongoing conflict in Ukraine, continue to keep safe-haven demand alive. While this has prevented sharper losses, it has not been sufficient to drive sustained upside momentum.
Additionally, the possibility of Donald Trump’s return to the White House in 2025 adds another layer of uncertainty. Potential trade conflicts and protectionist policies could disrupt markets, offering a bullish backdrop for gold in the longer term.
Looking Ahead
Gold’s direction next week will hinge on Treasury yields, dollar strength, and upcoming U.S. economic data. While geopolitical risks remain supportive, the dominant drivers remain Fed policy and interest rates. If yields continue to climb, gold may face further declines. However, weaker economic data or dovish Fed commentary could provide the spark needed to reignite buying interest.
