Gold Hits New Weekly Highs but May Face Resistance Ahead
Gold prices have been steadily rising over the past two days, hitting new weekly highs in the European session on Friday. Despite this, analysts at UOB Group warn that there may be resistance ahead for the precious metal.
The recent decline in crude oil prices has led to a softening of US bond yields, which is supporting gold prices. However, the Federal Reserve's decision to raise interest rates for the first time since 2023 and its hawkish outlook has revived demand for the US dollar, potentially capping further gains for gold.
UOB Group analysts noted that the Fed's return to a hiking cycle is reshaping the dollar outlook. They expect two more rate hikes this year, which would narrow the US interest rate gap with other G-10 countries and support the dollar.
The XAU/USD pair has been trading above key Fibonacci support levels but is still below the 100-day Exponential Moving Average at $4,368. The Relative Strength Index (RSI) sits near neutrality, while the Moving Average Convergence Divergence (MACD) remains in negative territory.