• Gold may find the primary resistance at the three-month high of $4,697.07.
• The 14-day Relative Strength Index at 67 shows strong bullish momentum.
• The nine-day EMA of $4,557.72 acts as the primary support.

Gold (XAU/USD) extends its gains for the second successive day, trading around $4,610 during the European hours on Friday. The price of the precious metal is remaining within the ascending channel pattern, suggesting a persistent bullish bias.

The XAU/USD pair is retaining a constructive bullish bias as spot holds above both the nine-period and 50-period Exponential Moving Averages (EMAs), keeping the short- and medium-term trends aligned to the upside. The 14-day Relative Strength Index (RSI) stands around 67, hovering in bullish territory but shy of extreme overbought conditions, which suggests upside momentum is still dominant though increasingly stretched.

Gold price may rise toward the three-month high of $4,697.07, reached on August 25. A break above this level would open the doors for the XAU/USD pair to reach the upper boundary of the ascending channel around $4,850.00.

On the downside, the immediate support appears at the nine-day EMA of $4,557.72, followed by the lower boundary of the ascending channel around $4,500. A break below this confluence support zone would weaken the bullish bias and put downward pressure on the Gold price to test the 50-day EMA at $4,336.84, followed by the three-week low of $4311.04, which was recorded on August 14.

Gold could soften as real yields firm, Oil extends gains

Analysts at Deutsche Bank highlight a firmer backdrop in rates and commodities, noting that the “10y US Real Yield @ 2.34 // 2 bp” and “10y US Breakevens @ 2.33 // 1 bp” both edged higher, alongside a rise in “10y German Breakeven @ 2.13 // 2 bp.” Credit markets were broadly steady, with “iTraxx Europe 125 @ 51 // unch,” “CDX 125 @ 50 // unch,” and “CDX EM @ 98.4 // unch,” while financial indices were little moved as “iTraxx Sen Fin @ 54 // unch” and “iTraxx Sub Fin @ 87 // +1” showed only marginal shifts. In commodities and FX, Deutsche Bank points to “WTI Oil^ @ 83.13 // +1.94%” and a slightly softer Euro as “EUR/USD^ @ 1.165 // -0.10%.” Equity sentiment in Asia was constructive, with the “NIKKEI @ 66624 // +0.74%” and “Hang Seng @ 25685 // +0.47%,” while volatility eased as the “VIX @ 14.51 // -0.70” slipped further. Against this backdrop of rising real yields and stronger Oil, the bank notes that “Gold^ @ 4579 // -0.85%” came under pressure.