Gold Extends Record Rally as Dollar Weakness and Fed Uncertainty Align

Gold has pushed to fresh record highs above 5,300, extending a well-established bullish trend. The move has been driven by a sharp decline in the US dollar, heightened geopolitical risk, and anticipation ahead of the Federal Reserve’s rate decision. With the dollar at multi-year lows and investors increasingly favouring hard-asset protection, gold remains firmly supported despite stretched technical conditions.

Macro and Market Backdrop

The primary driver behind gold’s latest surge is renewed weakness in the US dollar. The dollar has fallen to its lowest level since early 2022, with selling pressure accelerating after President Trump signalled little concern over further USD declines. This has undermined the dollar’s traditional safe-haven role and enhanced gold’s appeal as an alternative store of value.

Geopolitical risk has added a second layer of support. While tensions with Europe have eased following a pullback on tariff threats, uncertainty remains elevated elsewhere. Warnings of potential tariffs on Canada tied to China trade relations, alongside ongoing US-Iran tensions, have kept safe-haven demand firmly in place.

Against this backdrop, gold continues to attract inflows from investors seeking insulation from both political risk and currency depreciation.

Fed Decision Risk

Attention now turns to the Federal Reserve’s policy decision. Rates are widely expected to remain unchanged following a series of cuts late last year, placing the emphasis squarely on Chair Powell’s press conference.

A hawkish tone could offer temporary support to the US dollar and slow gold’s advance. However, any confirmation of a more cautious or dovish bias would likely reinforce the broader trend of dollar weakness, allowing gold’s rally to extend further.

Importantly, the current move in gold suggests markets are positioning ahead of the decision rather than waiting for confirmation.

Technical Outlook: XAU/USD

From a technical perspective, gold remains in a strong uptrend. Price has broken decisively above its rising channel and continues to print higher highs and higher lows, signalling sustained bullish control.

Overbought conditions have so far failed to deter buyers, highlighting strong trend conviction. With little historical resistance overhead, upside focus shifts toward the 5,350 and 5,400 round-number zones.

On the downside, near-term support sits around 5,270, the former upper boundary of the rising channel. A deeper pullback would bring 5,200 into view, followed by the 5,100 region. For now, these levels represent corrective risks rather than trend reversal signals.

XAU/USD Weekly Chart

Bottom Line

Gold’s breakout to new record highs reflects a powerful alignment of macro forces. A weakening US dollar, persistent geopolitical uncertainty, and policy ambiguity around the Federal Reserve are all reinforcing demand. While the market is technically stretched, momentum remains firmly with the bulls. Unless the Fed delivers a meaningful hawkish surprise, gold’s broader trend continues to favour further upside, with any pullbacks likely viewed as consolidation rather than reversal.