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21
02, 2026
XAU/USD eyes next breakout on US GDP, PCE inflation data
Gold sticks to recent gains around the $5,000-mark early Friday, biding time before the high-impact US macro events. The focus is now on the US fourth-quarter (Q4) Gross Domestic Product (GDP), core Personal Consumption Expenditures (PCE) Price Index and the Supreme Court’s ruling on President Donald Trump’s tariffs.
Gold: All eyes on US data dump
Gold continues its struggle to extend the recovery from near the $4,850 region for the third straight day as persistent US Dollar (USD) strength outweighs safe-haven demand for the yellow metal amid looming geopolitical tensions between the US and Iran.
The Greenback is in a bullish consolidative phase, courtesy of the hawkish Minutes of the US Federal Reserve’s (Fed) January monetary policy meeting and a recent slew of upbeat economic data.
Data published by the Labor Department on Thursday showed that the US Initial Jobless Claims declined by 23,000 to 206,000 in the week ended February 14. The data fell by the most since November, adding to evidence of stabilization in the US labor market.
Meanwhile, the Minutes on Wednesday suggested that the Fed remains in no rush to cut interest rates.
Additionally, concerns surrounding the disruptions led by Artificial Intelligence (AI) and the disappointing earnings report from Walmart tempered the recent market optimism, boosting the USD’s appeal as a safety net.
However, Gold continues to find a floor amid renewed geopolitical tensions between the US and Iran, while untouched bets for three 25 basis points (bps) Fed rate cuts this year also remain supportive of the non-yielding bullion.
After CBS News reported that a potential US military strike on Iran could come as early as Saturday, Trump warned late Thursday that Iran must make a deal, or “bad things will happen,” with the threat of military strikes still hanging heavy over delicate nuclear negotiations, per BBC News. In response, Iran threatened a decisive response if attacked,
With geopolitical risks in play, the next big catalysts for Gold are the US GDP, PCE inflation and Supreme Court’s verdict on Trump’s tariffs.
Also, of note will be the global business PMI data, which significantly impact the broader market sentiment.
The US economy is expected to expand by 3% on an annualized basis in Q4 2025, against a 4.4% growth reported in the previous quarter. Meanwhile, the core PCE Price Index, the Fed’s preferred inflation gauge, is expected to rise by 2.9% in December after increasing by 2.8% in November.
The US data points will be crucial to reset the market’s pricing of the Fed rate cut bets, heavily influencing the USD’s performance and eventually the Gold price direction.
Gold price technical analysis: Daily chart
The 21-day Simple Moving Average (SMA) rises to $5,006.49 and caps the immediate recovery, while price holds above the ascending 50-day SMA at $4,703.94. The 100- and 200-day SMAs also climb and sit well below spot, reinforcing a broader bullish bias despite near-term hesitation. The 14-day Relative Strength Index stands at 54 (neutral), indicating momentum has cooled but remains slightly positive. Measured from the $5,597.89 high to the $4,401.99 low, the 50% Fibonacci (Fibo) Retracement at $4,999.94 acts as nearby resistance, with the 61.8% Fibo retracement at $5,141.05 overhead; a daily close above these hurdles could extend the advance.
Failure to reclaim the short-term average would keep price contained beneath the 21-day SMA, leaving pullbacks to lean on dynamic trend support from the rising 50-day average around $4,700, where the 23.6% Fibo Retracement also lingers. A deeper setback would bring the 100-day SMA at $4,405.36 into view, while the 200-day SMA at $3,915.63 anchors the longer-term uptrend. Conversely, a decisive push back above the 21-day SMA would refocus upside momentum toward higher Fibonacci barriers and preserve the broader bullish structure.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Gross Domestic Product Annualized
The real Gross Domestic Product (GDP) Annualized, released quarterly by the US Bureau of Economic Analysis, measures the value of the final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of the nation’s overall economic health. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
