Gold (XAU/USD) attracts some dip-buyers in the vicinity of the overnight swing low and climbs to the top end of its daily range during the first half of the European session on Friday. Against the backdrop of expectations that the US Federal Reserve (Fed) will lower borrowing costs two more times this year, a modest US Dollar (USD) pullback from its highest level since early August offers support to the non-yielding yellow metal. Apart from this, the cautious market mood acts as a tailwind for the safe-haven bullion amid the intensifying Russia-Ukraine war and the prolonged US government shutdown.
Despite the supportive fundamental backdrop, the XAU/USD pair remains below the $4,000 psychological mark and the all-time peak touched on Wednesday. The Israel-Hamas agreement to the first phase of the peace deal helps ease some of the geopolitical tensions and turns out to be a key factor keeping a lid on the Gold price. Furthermore, political chaos in France and Japan, which has been weighing on the shared currency and the Japanese Yen (JPY), limits the USD losses and caps the commodity, which remains on track to register gains for the eighth consecutive week ahead of more comments from Fed officials.
- The US Dollar rose to its highest level since early August on Thursday, prompting the XAU/USD bulls to take some profits off the table following the recent record-setting rally. Adding to this, a ceasefire deal between Israel and Hamas turned out to be another factor that contributed to the safe-haven Gold’s overnight downfall.
- Federal Reserve Chair Jerome Powell offered no fresh policy signals, while Minutes from the September FOMC meeting released on Wednesday showed lingering inflation concerns. Traders, however, are still pricing in a greater chance that the US central bank will lower borrowing costs two more times by the end of this year.
- The government shutdown is now in its second week amid few signs of progress toward a deal to advance funding bills. The Senate rejected motions to advance competing bills for the seventh time on Thursday and will not hold any further votes until at least next week, when the upper chamber is expected to return on Tuesday.
- US President Donald Trump said Thursday that Washington and NATO allies were stepping up the pressure to end the war in Ukraine. Ukraine reported a large-scale Russian assault on Kyiv early Friday, involving ballistic missiles and drone strikes, which targeted critical infrastructure and caused widespread power outages.
- This keeps geopolitical risks in play and largely offsets the optimism led by the Israel-Hamas agreement on the first phase of the Gaza peace plan. Apart from this, a modest USD downtick supports the precious metal, which seems poised to register gains for the eighth consecutive week amid a supportive fundamental backdrop.
The overnight breakdown and acceptance below the 100-hour Simple Moving Average (SMA) could be seen as the first sign of a bullish exhaustion. That said, it will still be prudent to wait for some follow-through selling below the overnight swing low, around the $3,944 region, before positioning for any meaningful corrective decline. The Gold price might then accelerate the downfall towards testing the $3,900 round-figure mark.
On the flip side, any intraday positive move beyond the $4,000 mark is likely to confront a hurdle near the $4,035-4,036 region ahead of the $4,059-4,060 area, or the all-time peak touched on Wednesday. Some follow-through buying will be seen as a fresh trigger for bulls and lift the Gold price towards the $4,100 round-figure mark.
Michigan Consumer Sentiment Index
The Michigan Consumer Sentiment Index, released on a monthly basis by the University of Michigan, is a survey gauging sentiment among consumers in the United States. The questions cover three broad areas: personal finances, business conditions and buying conditions. The data shows a picture of whether or not consumers are willing to spend money, a key factor as consumer spending is a major driver of the US economy. The University of Michigan survey has proven to be an accurate indicator of the future course of the US economy. The survey publishes a preliminary, mid-month reading and a final print at the end of the month. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Next release:
Fri Oct 10, 2025 14:00 (Prel)
Frequency:
Monthly
Consensus:
54.2
Previous:
55.1
Source:
University of Michigan
Consumer exuberance can translate into greater spending and faster economic growth, implying a stronger labor market and a potential pick-up in inflation, helping turn the Fed hawkish. This survey’s popularity among analysts (mentioned more frequently than CB Consumer Confidence) is justified because the data here includes interviews conducted up to a day or two before the official release, making it a timely measure of consumer mood, but foremost because it gauges consumer attitudes on financial and income situations. Actual figures beating consensus tend to be USD bullish.
