Gold outlook: XAU/USD pulls back from highs but on course for eighth week winning run
Gold eased back in the first half of Friday’s session, presumably on the back of some profit-taking. Barring a more significant sell-off later, the metal was still on course to potentially close higher for as eighth consecutive week. Thanks to ongoing haven demand, fuelled by geopolitical and trade tensions, gold remains well-supported, deterring any significant profit-taking or speculative shorting for the time being. Traders continue to buy on dips, maintaining the strong bullish momentum that has characterised recent price action. Last Friday’s sharp decline was swiftly met with renewed demand this week, reinforcing the resilience of the metal’s uptrend. Meanwhile, uncertainty over Trump’s ability to negotiate a swift resolution in Ukraine—despite his confident rhetoric—has helped sustain gold’s appeal as a safe-haven asset. With Kyiv and EU both appearing increasingly isolated in the US-Russia peace talks, investor appetite for gold remains firm for now. But the correction risks are growing amid severely overbought technical conditions.
What could turn the gold outlook bearish?
For all the current strength in gold, a corrective move lower would not be entirely unwelcome, particularly among traders wary of an overstretched market. Should geopolitical tensions ease, gold’s haven appeal may weaken. Trump’s ambitions to mediate in Ukraine and Gaza could reduce demand for defensive assets, though this remains far from assured. Additionally, his aggressive fiscal policies and protectionist stance may fuel inflationary pressures, which could prompt further delays in the Federal Reserve’s rate cut. Any delay in monetary easing would, in turn, support bond yields, creating headwinds for gold.
Touching on the same subject of Trump’s administration and its impact on gold market volatility, Philip Smith, Chief Executive, StoneX Group, said in a recent interview with Sky News Arabia that ongoing ambiguity surrounding tariffs is exerting a "disproportionate and distorting effect on gold prices”.
Nonetheless, from a StoneX perspective, Smith remains confident. The Precious Metals division at StoneX offers a full range of gold-related services, including physical trading, financial derivatives, vaulting, and storage. Smith asserts that StoneX is well-equipped to support major banks and financial institutions that lack direct access to physical gold, helping them navigate the uncertainties brought on by tariffs and market fluctuations. “We’re all seeing a very good position to be able to facilitate others who are struggling to bring gold into the United States,” Philip stated.
At this stage, though, there are no clear technical signals of an imminent reversal. However, a move below $2900 could serve as an early warning that bullish momentum is fading. A decisive break beneath $2877 would be more concerning, as it would establish a lower low, potentially shifting sentiment towards a more corrective phase.
Key technical levels for XAU/USD
Source: TradingView.com
Gold is now grappling with resistance around $2940–$2950, an area that aligns with the 161.8% Fibonacci extension from October’s downswing. This zone has already prompted some profit-taking, while the daily RSI remains in overbought territory, with negative divergence suggesting the rally may be losing steam. That said, a clean break above this range could pave the way for further upside, with the psychologically significant $3K level coming into view.
On the downside, $2877 remains a key technical threshold. Should this support give way, it would confirm a short-term shift in the gold outlook, potentially opening the door to a deeper pullback. If that happens, we could then see some follow-up technical selling towards the $2790-$2800 key support area.
Until then, the broader trend remains intact, with buyers still eager to step in at the first sign of weakness.
About StoneX Group Inc.
StoneX Group Inc., through its subsidiaries, operates a global financial services network that connects companies, organizations, traders and investors to the global market ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services, high touch service and deep expertise. The Company strives to be the one trusted partner to its clients, providing its network, product and services to allow them to pursue trading opportunities, manage their market risks, make investments and improve their business performance. A Fortune 100 company headquartered in New York City and listed on the Nasdaq Global Select Market (NASDAQ:SNEX), StoneX Group Inc. and its more than 4,500 employees serve more than 54,000 commercial, institutional, and payments clients, and more than 400,000 retail accounts, from more than 80 offices spread across six continents.
Further information on the Company is available at www.stonex.com.
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