Gold Climbs as Fed Tensions Weaken US Dollar, Focus Shifts to Rate Cuts

Gold Rises on Less Strong US Dollar Amid Intensifying Pressure for Fed Interest Rate Cuts

Gold (XAU/USD) ticked higher on Thursday as sentiment toward the US Dollar weakened, driven by continued speculation over the timing of Federal Reserve interest rate cuts. The yellow metal traded around $3,340 during the European session, climbing despite a global shift toward riskier assets.

Gold Gains as Confidence in US Dollar Wanes

The market’s attention has sharply turned to the growing rift between Fed Chair Jerome Powell and President Donald Trump, with the latter renewing his criticism of Powell’s cautious approach. The ongoing feud is shaking investor confidence in Fed independence, contributing to USD softness and renewed interest in safe-haven assets like gold.

XAU/USD Technical Outlook

Gold is currently navigating between:

• 20-day SMA (resistance)
• 50-day SMA (support)

This range-bound trade suggests that while upside remains limited in the short term, buyers are gradually returning to the market on dips.

Data-Heavy US Calendar in Focus

Markets now await key US economic reports that could steer rate expectations:

• 12:30 GMT:
  • Final Q1 GDP
  • Initial Jobless Claims
  • Durable Goods Orders (May)
• 14:00 GMT:
  • Pending Home Sales (May)
• Later today:
  • Speeches from Fed officials

These data points will help shape market pricing on when rate cuts might begin, with bets increasing for action as early as Q3 2025.

Market Mood Remains Cautiously Bullish on Gold

Despite a mild risk-on mood in global markets, gold’s downside has been muted—largely due to the dent in the US Dollar’s dominance. Traders are hedging uncertainty tied to central bank policy and political influence, particularly after Trump’s recent comments labeling Powell as ineffective.

Related Tredu Reads:

• XAU/USD Eyes Breakout as Fed Tensions Deepen
• US Dollar Outlook: Policy Clash Fuels Volatility
• Key US Data Preview: GDP, Jobs, and Housing in Focus

Conclusion:
Gold is holding steady as it benefits from renewed market skepticism toward the US Dollar and rising pressure for monetary easing. Eyes are now on today's economic releases to gauge whether the Fed’s hand will be forced sooner rather than later.

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