Gold prices extended their gains for a second consecutive session on Friday, trading near $4,180 as buyers set their sights on the $4,230 area, the upper boundary of October’s trading range. The precious metal has benefited from declining US Treasury yields and dovish comments from Federal Reserve officials this week, which have weakened support for the US dollar.
XAU/USD Maintains Bullish Momentum
XAU/USD traded at $4,179, maintaining a short-term bullish bias as buyers targeted the upper end of the three-week horizontal trading range near $4,230. Technical indicators on the four-hour chart continued to support the positive outlook.
The Relative Strength Index (RSI) stood near 57 in positive territory, while the Moving Average Convergence Divergence (MACD) remained firmly above the zero line, signaling moderate upward momentum.
Gold faces initial resistance at the psychological $4,200 level, followed by the key $4,230 resistance, which marks the October 2 high. A decisive break above this level could confirm a bullish reversal and open the way toward the September 25 high near $4,315.
On the downside, initial support lies around the intraday low near $4,150, followed by the lower boundary of the trading range at approximately $4,070. A bearish break below these levels would invalidate the short-term bullish outlook and expose gold to further losses toward the psychological $4,000 level, near the late-July and early-August lows.
US Economic Data Fails to Lift Dollar
US economic data released on Thursday showed that the Producer Price Index (PPI) rose faster than expected in September, following a stronger-than-anticipated consumer inflation report released a day earlier. Retail sales also demonstrated unexpected resilience despite rising prices.
However, the data failed to provide meaningful support for the US dollar, as market expectations for a Federal Reserve interest rate hike in October remained subdued.
Several Fed officials indicated that the central bank was likely to keep interest rates unchanged at its next meeting while awaiting further evidence of the economic impact of September’s rate increase.
Warsh Offers No Fresh Policy Signals
Federal Reserve Chair Kevin Warsh spoke at an International Monetary Fund (IMF) forum in Bangkok early Friday. He praised the resilience of the US economy and reaffirmed the central bank’s commitment to combating inflation.
However, Warsh offered no new signals regarding the Fed’s near-term monetary policy direction, leaving investors focused on incoming economic data and further comments from central bank officials.
With US Treasury yields declining and expectations for another immediate rate hike remaining limited, gold could retain its short-term bullish momentum. Nevertheless, the $4,200–$4,230 resistance zone remains critical in determining whether XAU/USD can extend its recovery toward $4,315.