With prices approaching psychological resistance at $2,800, the focus has shifted to managing downside risk. Key support levels include a minor pivot at $2,750, with a break below that could potentially trigger a trend reversal if prices fall to $2,708.76 or lower. Should PCE numbers be warmer than expected, indicating resilient inflation, the dollar could rise, potentially adding downward pressure on gold.
Conversely, if the numbers match or underperform expectations, it could catalyze a rally in gold, driven by confidence in continued Fed rate cuts. Lower interest rates increase the appeal of unprofitable precious metals, creating an attractive hedge in an inflation-sensitive environment.
PCE results determine short-term direction for gold prices
The short-term outlook for gold remains closely tied to the PCE release and its implications for Fed policy. Should the core PCE fall in line with or below expectations, gold could find support as the market embraces the Fed’s potential dovish bias. In such a scenario, prices could challenge the $2,800 level and possibly reach new highs, supported by expectations of monetary easing.