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Gold flat lines below $5,200; traders look to US PPI for fresh impetus

  • Gold consolidates in a narrow range below the $5,200 mark during the Asian session.
  • Geopolitical risks and trade uncertainties continue to act as a tailwind for the XAU/USD.
  • Reduced Fed rate cut bets offer support to the USD and cap the non-yielding commodity.

Gold (XAU/USD) struggles to capitalize on its modest gains registered over the past two days and trades below the $5,200 mark through the first half of the European session on Friday. Geopolitical risks remain in play amid a large US naval and air power buildup in the Middle East. Moreover, US President Donald Trump laid out the case for a possible attack on Iran in his State of the Union speech on Tuesday, saying that he would not allow the world's biggest sponsor of terrorism to have a nuclear weapon. This, along with persistent trade-related uncertainties, acts as a tailwind for the safe-haven precious metal.

The US moved ahead with a 10% tariff on all non-exempt goods, the rate initially announced by Trump on Friday, following the Supreme Court verdict against his sweeping tariffs rather than the 15% he promised a day later. However, a White House official said the administration is working to raise levies to 15%, fueling worries about retaliatory measures and the economic fallout from disruptions to global supply chains. Given Trump's mercurial turns over tariffs, the anxiety over how long this rate will continue keeps investors on edge and turns out to be another factor that underpins the traditional safe-haven Gold.

Meanwhile, traders trimmed their bets for more aggressive policy easing by the US Federal Reserve (Fed) after minutes from the January FOMC meeting showed that the central bank is in no hurry to cut interest rates further. Moreover, officials discussed the possibility of raising rates if inflation does not cool. This keeps the US Dollar (USD) well within striking distance of the monthly peak and caps the upside for the non-yielding Gold. Furthermore, the US and Iran agreed to more nuclear talks, easing concerns about potential hostilities. This contributes to keeping a lid on the commodity and warrants caution for bulls.

The market focus now shifts to the release of the US Producer Price Index (PPI), due later during the North American session. Apart from this, speeches by influential FOMC members will play a key role in driving the USD demand and providing some impetus to the Gold heading into the weekend. Nevertheless, the XAU/USD pair remains on track to register gains for the fourth week in a row, and the broader fundamental backdrop suggests that any corrective pullback is more likely to be bought into.

XAU/USD 1-hour chart

Chart Analysis XAU/USD

Gold bulls struggle to build on strength beyond $5,200

The range-bound price action witnessed over the past three days or so constitutes the formation of a rectangle pattern on intraday charts. Meanwhile, the Gold holds above the rising 100-hour Simple Moving Average (SMA) near $5,176, keeping the short-term uptrend structure intact despite repeated intraday pullbacks. The Relative Strength Index (RSI) hovers just below 50, reflecting balanced momentum but not signaling downside pressure. The Moving Average Convergence Divergence (MACD) indicator remains slightly above the zero line, with the MACD line still over the signal line, which reinforces a modest upside tone rather than a momentum-driven rally.

Initial resistance emerges at the recent hourly highs around $5,195, where prior advances stalled, and intraday sellers reappeared. A convincing break above this barrier would open the way toward the next upside area near $5,210, where the latest upward leg would begin to look extended. On the downside, immediate support stands at the 100-hour SMA around $5,176, with a sustained drop below this level exposing deeper support at $5,165, aligned with recent closing lows and the lower end of the latest consolidation band.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Producer Price Index (YoY)

The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

Read more.

Next release: Fri Feb 27, 2026 13:30

Frequency: Monthly

Consensus: 2.6%

Previous: 3%

Source: US Bureau of Labor Statistics

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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