Gold price supported by dovish Fed outlook despite improving market sentiment

Gold (XAU/USD) is trading higher on Friday, supported by growing expectations of a Federal Reserve rate cut and mixed U.S. economic data. At the time of writing, XAU/USD has rebounded above $3,350, edging closer to the upper boundary of a symmetrical triangle pattern and signaling a potential breakout.

Investors are evaluating fresh U.S. housing data released earlier in the session. June's Building Permits and Housing Starts showed notable improvement, offering signs of recovery in the real estate sector.

In addition, the University of Michigan’s preliminary Consumer Sentiment Index for July rose to 61.8, up from 60.7 in June and beating the forecast of 61.5—highlighting growing consumer confidence.

However, inflation expectations continued to soften. The UoM’s 1-year inflation outlook declined to 4.4% from 5%, while the 5-year outlook dropped to 3.6% from 4% in June.

Despite holding interest rates steady in the 4.25%–4.50% range, the Fed is under close scrutiny as markets look for signals on the timing of future policy changes. According to the CME FedWatch Tool, there is now a 57.8% chance of a 25 basis point rate cut in September, while the probability of rates remaining unchanged stands at 39.5%.

Daily Market Movers: Gold Steadies as Traders Weigh U.S. Data and Fed Commentary

• Gold remains range-bound on Friday, supported by macroeconomic data and mixed signals from Federal Reserve officials. The metal trades near $3,350, reflecting cautious investor sentiment amid ongoing debate over the timing of U.S. interest rate cuts.
• June housing data showed signs of resilience in the U.S. real estate market. Building Permits rose slightly to 1.39 million, exceeding expectations of 1.394 million, and marking a 0.2% rebound after a 2% drop in May. Housing Starts posted a stronger-than-expected 1.321 million increase, up from 1.263 million in May—an impressive 4.6% gain following last month’s 9.7% decline.
• Federal Reserve officials presented contrasting views this week, adding to market uncertainty. Fed Governor Adriana Kugler took a hawkish stance, warning that rate cuts are unlikely in the near term as tariffs continue to feed into consumer prices.
• In contrast, San Francisco Fed President Mary Daly struck a more neutral tone, suggesting that two rate cuts by the end of 2025 are “reasonable,” while cautioning against maintaining overly tight policy that could weaken the labor market.
• Meanwhile, Fed Governor Christopher Waller leaned dovish, stating it would be “sensible” for the Fed to cut rates by 25 basis points at the July meeting due to signs of slowing growth and softening employment conditions.
• Adding to the cautious tone, Wednesday’s Consumer Price Index (CPI) data indicated a pickup in inflation, reinforcing the possibility that the Fed could delay rate cuts until October, rather than moving in September as previously expected.

Gold Technical Outlook: XAU/USD Holds Steady Near $3,350 Within Triangle Formation

Gold (XAU/USD) continues to trade near $3,350 on Friday, consolidating within a symmetrical triangle pattern. The next resistance level lies near $3,362—the descending trendline of the triangle. A breakout above this level would bring the 23.6% Fibonacci retracement at $3,371 into view.

If bulls manage to push through, the price could test the psychological barrier at $3,400, with further upside targeting April’s high near $3,452.

On the downside, initial support lies at the 50-day Simple Moving Average (SMA) at $3,324, followed by stronger support at the 38.2% Fibonacci level around $3,292. A break below this region would expose the 100-day SMA and the 50% retracement at $3,228. A downside break of the triangle could trigger renewed bearish momentum, with $3,200 as a likely target.

The Relative Strength Index (RSI) currently sits near 54, indicating neutral momentum and highlighting the market’s indecision as traders await a clear directional catalyst.

Gold daily chart