Gold traded above 4,500 USD per ounce on Friday, on track to close higher for the third straight week. Demand for safe-haven assets has increased amid heightened volatility in foreign exchange and debt markets. Rising oil prices continue to fuel inflation risks.
Gold surged more than 4% on Wednesday after the US Treasury announced plans to at least double the size of its long-term debt buybacks in an effort to curb borrowing costs. This triggered a sharp decline in US Treasury yields and the dollar, boosting gold’s appeal.
The metal held most of its gains even after bond yields recovered, as investors remain doubtful that the authorities’ measures will provide a lasting solution to high long-term borrowing costs. As a result, demand for gold has remained resilient.
Additional support has come from rising oil prices amid US preparations for a new round of sweeping economic sanctions against Iran, heightening fears of renewed inflationary pressures.
At the same time, gold continues to benefit from investment demand and central bank purchases, particularly from China.
Technical analysis
On the H4 XAU/USD chart, the market formed a consolidation range around the 4,330 USD level and, following an upside breakout, moved higher towards 4,660 USD. A new consolidation range is now forming around 4,522 USD, with 4,660 USD anticipated as the local upside target. The MACD indicator supports this scenario, with its signal line above the centre line and trending upward.
On the H1 chart, the market has broken above the 4,522 USD level and is moving higher towards 4,660 USD. A broad consolidation range is forming around 4,500 USD, with a move higher to 4,660 USD expected, followed by a decline to 4,500 USD. The Stochastic oscillator confirms this scenario, with its signal line above 80 and trending upward.
Conclusion
Gold is set to close higher for the third consecutive week, supported by heightened market volatility, rising oil prices, and sustained inflationary concerns. The US Treasury’s announcement of increased long-term debt buybacks triggered a sharp drop in yields and the dollar, boosting gold’s appeal. Even after bond yields recovered, investors remain sceptical about the lasting impact of the authorities’ measures, sustaining demand for the metal. Additional support has come from rising oil prices amid preparations for new US sanctions against Iran, as well as continued central bank purchases, particularly by China. Technically, gold appears poised for further upside towards 4,660 USD, with any pullback likely to find support around 4,500 USD. The metal’s direction will depend on US monetary policy signals, geopolitical developments, and the trajectory of energy prices.
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