By Joseph Dahrieh, Managing Principal at Tickmill
Gold steadied on Friday, consolidating after breaking above the USD 4,000 threshold for the first time earlier in the week. The metal remains on track for an eighth consecutive weekly gain, underpinned by expectations of further Federal Reserve rate cuts and lingering global uncertainties.
Profit-taking and easing geopolitical tensions in the Middle East contributed to a pause in momentum. Israel ratified the first phase of a ceasefire deal with Hamas, which includes a partial military withdrawal from Gaza and the release of hostages within days, although sporadic airstrikes continued. The prospect of a truce reduced immediate safe-haven demand as investors cautiously monitored developments.
Still, underlying fundamentals remain supportive. The ongoing US government shutdown has delayed key economic data and contributed to fiscal uncertainty, while recent Fed commentary has reinforced expectations of further monetary easing. New York Fed President John Williams said he was open to another rate cut, echoing last week’s FOMC minutes that highlighted labour market risks even as inflation pressures persist.
Meanwhile, tensions in Eastern Europe persisted, helping to maintain a floor under safe-haven assets.