Key Points:
Gold prices (Symbol: XAUUSD) remain near record highs of $2,670 per ounce as traders await the U.S. Personal Consumption Expenditures (PCE) report for clearer insights into the monetary policy direction of the Federal Reserve.
Picture: XAUUSD prices stay near record highs as traders await US inflation data, as observed on the VT Markets app.
Gold prices have experienced a pullback from the recent high of 2685.58, with the price currently consolidating around the 2660 level. On the 30-minute chart, we observe that the price is holding just above the 24- and 72-period exponential moving averages (EMAs), suggesting a short-term support zone.
The MACD is showing signs of waning bullish momentum as the histogram turns towards zero, indicating potential consolidation or a minor correction.
We are watching the key support at 2650, where a breakdown could lead to further declines, with the next support near 2625. On the upside, resistance lies at 2680, with a move above potentially signaling renewed bullish strength.
Market participants remain cautious after strong U.S. economic data reduced the likelihood of aggressive Fed rate cuts, tempering the bullish case for gold.
Related content: Interest rate tug of war for central banks
Markets are currently pricing in a 49% chance of a 50 basis point rate reduction in November, showing uncertainty about the next steps of the Fed. Meanwhile, fiscal stimulus in China and growing geopolitical tensions in the Middle East continue to boost gold’s status as a safe-haven asset.
Read more on: How to trade gold
The yellow metal is on track for its third straight weekly gain, reflecting sustained investor interest.
Caution ought to be maintained ahead of the PCE data release, as any strong inflation signals could affect the likelihood of future rate cuts. The ongoing geopolitical risks may lead to further upward pressure on gold prices, as investors hedge against global uncertainty.
Traders may continue to target record-high levels, but volatility is expected, especially if the Fed signals a softer stance on future rate cuts.
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