Gold Steady as Markets Brace for PCE Inflation

1 July 2025, 07:02

Share on:

Key Takeaways:

*Gold holds above $3,320 as dollar weakness and policy risks support safe-haven demand

*Traders eye Core PCE for rate-cut clues as Fed credibility concerns grow

*Geopolitical and fiscal uncertainty keep gold’s upside bias intact despite ceasefire relief

Market Summary:

Gold prices held firm on Thursday, trading above $3,320 as investors awaited the Federal Reserve’s preferred inflation gauge—Core PCE—for further policy clarity. A sustained slide in the U.S. dollar, coupled with persistent fiscal and political uncertainties, continued to bolster demand for the precious metal. While a tentative ceasefire between Israel and Iran has eased immediate geopolitical risks, lingering doubts over its durability—as well as growing concerns over U.S. central bank independence—have kept gold supported as a hedge against future volatility.

The metal has benefited from recent weakness in U.S. economic data, including a downward revision to Q1 GDP and a rise in continuing jobless claims. These developments have reinforced market expectations for a potential Fed rate cut as early as July, with futures now pricing in a 27% chance. Meanwhile, President Trump’s signaling of a possible early replacement for Fed Chair Powell has raised fears of political interference in monetary policy, adding to the broader uncertainty.

On the fiscal side, U.S. debt sustainability remains under scrutiny. A depreciating dollar not only complicates the government’s ability to service foreign-denominated liabilities, but also enhances gold’s appeal as a long-term inflation and currency hedge. Despite a modest pickup in risk appetite across markets, gold remains in demand due to these underlying macroeconomic risks.

Near-term price direction will depend heavily on today’s Core PCE data. A softer-than-expected print may reinforce dovish Fed expectations, driving renewed upside toward the $3,370–$3,400 range. Conversely, a surprise uptick in inflation could spark a brief technical pullback, especially if it revives hawkish sentiment at the Fed.

While immediate geopolitical risks have receded, markets remain alert to potential flare-ups in the Middle East and upcoming trade tensions—particularly as the July 9 U.S. tariff deadline approaches. These factors are likely to keep gold’s safe-haven demand intact.

Technical Analysis

GOLD, H4

Gold prices are drifting lower within a narrow range, struggling to extend gains after failing to breach the $3,345 resistance zone. The metal continues to trade with a downward bias as it edges closer to the $3,315 and $3,295 support levels—areas that may offer short-term stabilization if downside momentum persists.

Momentum indicators are softening. The RSI has slipped below the neutral 50 mark, currently around 38, indicating weakening bullish momentum and a tilt toward bearish sentiment. Meanwhile, the MACD remains in negative territory with the histogram extending its red bars, reinforcing a cautious tone. The widening gap between the MACD and signal lines suggests that bearish momentum may continue in the near term.

Unless gold can reclaim ground above the $3,345 pivot level, the path of least resistance appears tilted to the downside. A sustained break below $3,315 could open the door to a deeper pullback toward $3,295. On the flip side, a shift in risk sentiment or dovish macro signals may help the metal retest the $3,345–$3,370 resistance band. For now, gold remains rangebound, caught between technical exhaustion and a lack of fresh directional drivers.

Resistance levels: 3345.00, 3370.00
Support levels: 3315.00, 3295.00