Gold price (XAU/USD) recovered its recent losses on Friday, advancing as the broader precious metals market rebounded on safe-haven demand. Despite this rebound, gold remains on track for its first weekly decline in five weeks, as escalating tensions in the Middle East have pushed oil prices higher, fueling inflation concerns and reducing bets on Federal Reserve rate cuts [1]. The US Dollar has strengthened, presenting challenges for dollar-denominated gold, as Federal Reserve officials continue to consider further rate hikes if inflation remains above target. A weaker US Dollar typically boosts demand for gold among foreign buyers, but the current environment is characterized by a stronger dollar [1].
The ongoing US-Israeli conflict with Iran has entered its seventh day, with Iran launching missiles and drones across the Gulf, striking an oil refinery in Bahrain, while Israel continued airstrikes on Tehran. The US suspended operations at its embassy in Kuwait. US President Donald Trump stated that Iranian officials reached out to him to end the war, but he insisted it was too late and that the US is pushing to destroy Iran. Iranian Foreign Minister Abbas Araghchi countered that Tehran has not sought a ceasefire and has no intention of negotiating, while Iran’s Islamic Revolutionary Guard Corps warned that retaliatory strikes would intensify in the coming days [1].
Traders are awaiting key US labor data, including Nonfarm Payrolls (NFP), with consensus expectations around 59K for February, following January’s above-trend reading of 130K. Retail Sales are expected to fall 0.3% month-over-month in January, after a flat reading in the previous month. Additionally, the US is set to introduce a temporary 15% global tariff this week, replacing the previous 10% rate, with the possibility of reverting to earlier levels within five months as new trade investigations proceed [1].
Gold is trading around $5,130 at the time of writing, testing the nine-day EMA barrier near $5,140. Technical analysis suggests a mildly bullish near-term bias, as the price holds above the rising 50-day EMA and respects recent highs. The nine-day EMA is flattening just above the spot price, indicating moderating but still bearish short-term momentum. The 14-day RSI at 53 remains above its midline, showing underlying buying pressure is intact [1].
CONCLUSION
Gold has rebounded on safe-haven demand amid escalating geopolitical tensions, but remains poised for a weekly decline due to inflation concerns and a stronger US Dollar. Technical indicators suggest a mildly bullish near-term bias, with traders awaiting key US economic data and tariff developments. The market impact is medium, as gold's price action reflects both geopolitical risks and shifting monetary policy expectations.