GOLD Analysis
Gold Dips Below $3,310 Ahead of PCE Data, Fed Patience Keeps Yields in Check
Highlights
- Gold dips under $3,300/oz as markets await the Fed’s preferred PCE inflation data to guide rate-cut expectations.
- Fed’s Daly keeps two rate cuts “on the table” but urges patience, supporting elevated real yields and pressuring bullion.
- Gold still up 0.4% in May—fifth straight month of gains—amid trade policy ambiguity, fiscal concerns, and sticky inflation.
Overview:
Gold edged down to around $3,280 per ounce, slipping below the $3,310 threshold as investors adopted a cautious stance ahead of the U.S. Personal Consumption Expenditures (PCE) inflation report, due later this week. The PCE reading— the Fed’s preferred inflation gauge—carries significant weight in shaping market expectations for the central bank’s next policy move, making it a focal point for bullion traders.
Earlier in the week, gold staged a modest rebound of nearly 1% when the U.S. Court of Appeals granted a temporary stay allowing President Trump’s contested reciprocal tariffs to remain in force. That legal reprieve briefly reignited safe-haven flows. However, the cautious tone returned quickly as the appeal process remains unresolved and ambiguity over long-term trade policy persists.
On the monetary front, San Francisco Fed President Mary Daly affirmed that two rate cuts still “remain on the table” for this year but emphasized the need for patience and data dependency. Her remarks underscore the Fed’s wait-and-see approach, which has kept real yields relatively elevated and capped gold’s upside. With the Fed holding rates steady and signaling no imminent easing until inflation and employment metrics clearly turn, bullion’s opportunity cost remains significant.
Despite this week’s pullback, gold has risen 0.4% in May—marking its fifth consecutive monthly gain—as a confluence of geopolitical tensions, fiscal concerns, and sticky inflation has underpinned its structural bid. Market participants now await not only the Core PCE Price Index but also a broader slate of U.S. data: the goods-trade balance, revised University of Michigan consumer sentiment and inflation expectations, alongside Euro-zone releases such as German retail sales m/m and Spanish flash CPI y/y. These figures will influence cross-asset flows, the dollar’s trajectory, and, by extension, gold’s near-term path.
Technical Levels & Strategy
- Support: $3,265 (intraday low)
- Resistance: $3,325 (recent high)
- Action: With the current market price at $3,295, a sell-on-rallies approach near $3,300-05 targeting $3,275, and a stop-loss above $3,315 is advisable to capitalize on headline-driven volatility and data-dependent turning points.