Gold (XAU/USD) is holding steady near its record highs, trading around $2,565-$2,570 as the European session approaches on Friday. The precious metal is benefiting from a softer-than-expected U.S. Producer Price Index (PPI) report, which indicated easing inflation and increased expectations for a substantial interest rate cut by the Federal Reserve (Fed) next week. This positive momentum for gold is further supported by a decline in U.S. Treasury bond yields, which has pushed the U.S. Dollar (USD) to a one-week low.
Ongoing geopolitical tensions, including conflicts in the Middle East and the prolonged Russia-Ukraine war, are also driving demand for gold as a safe-haven asset. The combination of these factors has helped gold break out of its recent trading range, suggesting potential for further gains in the near term.
However, traders may adopt a cautious stance ahead of significant central bank meetings next week, including the Fed’s decision on Wednesday and subsequent meetings by the Bank of England (BoE) and the Bank of Japan (BoJ) on Thursday and Friday, respectively.
