Gold Price Forecast: XAU/USD looks as if it has completed its correction – Commerzbank

FXStreet Insights Team FXStreet

Last week, Gold gained 2.5% to reach $1,855. This week, Gold’s direction is likely to be determined by today’s testimony by Fed Chair Powell and the US labour market data on Friday, strategists at Commerzbank report.

Interest rates are expected to peak at 5.5%

“According to the Fed Fund Futures, interest rates are expected to peak at 5.5%. Powell would have to adopt a very hawkish tone and labour market data would have to surprise significantly to the upside again for expectations to be ramped up any higher. In this scenario, Gold would come under pressure again – but otherwise, it looks as if it has completed its correction.”

“Interest rate expectations would need to fall again for prices to rise, yet neither Powell nor the labour market data are likely to send out any such signals.”

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FXStreet Insights Team

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EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold remains below $5,200 despite tariff jitters and geopolitical risks

Gold is seen consolidating in a range below the $5,200 mark during the Asian session on Friday amid mixed cues. Trade jitters, along with the risk of a potential US-Iran war, act as a tailwind for the safe-haven bullion. Meanwhile, the Fed's hawkish outlook keeps the US Dollar close to the monthly high and caps the non-yielding yellow metal. Nevertheless, the commodity remains on track to register gains for the fourth straight week, though the fundamental backdrop warrants some caution for bullish traders.