Quick overview

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Gold is seeing significant liquidation for the second day in a row on Friday following a parabolic increase of over 25% since the start of this month and a string of record highs set over the last two weeks or so, Amidst the optimism surrounding a Senate agreement to fund the federal government for the remainder of the fiscal year, the US dollar sees some positive movement.

Gold reduces significant intraday losses to the $5,100 range, but it appears vulnerable after a series of record highs set over the last two weeks or so and a parabolic increase of more than 25 percent since the beginning of this month.

Amidst the optimism surrounding a Senate agreement to fund the federal government for the remainder of the fiscal year, the US dollar sees some positive movement.

This turns out to be a major factor undermining the safe-haven precious metal and helps reduce short-term political uncertainty

However, the possibility of lower US interest rates and the risk of the Federal Reserve losing its independence could prevent any significant USD appreciation and support the lower-yielding gold.

Furthermore, investor sentiment may be impacted by US President Donald Trump’s tariff threats and ongoing geopolitical uncertainties, which should further limit bullion losses. Therefore, before confirming that the XAU/USD pair has peaked, bearish traders should exercise caution.