• Gold jumps above $4,600, heading for strong weekly gain.
• Strong US services data fails to halt Bullion momentum.
• Fed hike odds rebound, but US Dollar weakness supports Bullion.

Gold price hits a three-month high and is poised to end the week with gains of over 5.6%, even though business activity in the services sector in the US was solid. Recent developments in the Middle East and a softer US Dollar underpin the yellow metal, which has surpassed the $4,600 threshold. The XAU/USD trades at $4,622, up over 2.3%.

XAU/USD hits three-month high despite strong US services data

The US S&P Global Services PMI in August exceeded estimates of 54 to reach 56.8, the highest since December 2024, and crushed the previous month’s 54.6 print. However, not all is good news: the Manufacturing PMI slowed from 53.9 to 53.2, a five-month low.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said in ‌a statement. “US business is booming, with firms reporting the fastest output growth for over four years so far in the ​third quarter as the expansion picked up further momentum in August.”

The data was mostly ignored by investors, who continued to digest the bond buyback plan of the US Treasury. Scott Bessent, the US Treasury Secretary, said “an increased focus on fiscal consolidation,” will be the administration’s next strategy.

Bessent added that the government could further expand Treasury buybacks, a day after the department unveiled plans to double buybacks of longer-dated securities.

In the meantime, the US Dollar Index, which tracks the buck’s performance against a basket of six currencies, is somewhat flat near 98.82 but fails to cap the non-yielding metal´s advance.

US Treasury yields have resumed their advance. The US 10-year T-note yield is up 0.8% at 4.75%.

Poland’s central bank slowed Gold buying to 7.8 metric tons in July, data showed on Friday.

Money markets had priced in a 60% chance that the Federal Reserve (Fed) would hold rates unchanged at the September meeting, down from 68% a day ago. The odds for a 25-basis-point rate hike remaining near 40%, revealed Prime Terminal.

XAU/USD technical outlook: Gold buyers eye $4,700 as rally extends

Gold’s trend shifted higher as buyers reclaimed the 200-day Simple Moving Average (SMA) at $4,514, thereby exacerbating a rally above $4,600. Momentum remains bullish as depicted in the Relative Strength Index (RSI). This means Bullion could extend its gains in the near term.

The XAU/USD first resistance is the $4,650 psychologcail level, ahead of $4,700. Once those two levels are taken out, the next stop would be the May 8 high of $4,749, followed by $4,800.

If Gold tumbles below $4,600, the first support is the 200-day SMA at $4,514, ahead of $4,500. Below the next support is the 100-day SMA at $4,379, ahead of $4,300. Below this area, the next support is the 50-day SMA at $4,164.