Gold Price Analysis: XAU/USD Rises to $4,225 as Traders Await PCE and Eye Breakout Toward $4,264
Gold edges toward $4,225 as traders await PCE data, assess Fed rate-cut odds, and watch a rising channel that points to a potential breakout
Quick overview
- Gold (XAU/USD) has gained traction, rising above $4,218 after rebounding from a weekly low of $4,175.
- Traders are cautious ahead of the US PCE Price Index release, with expectations for headline inflation at 2.8% and core at 2.9%.
- Despite strong labor market data, the dollar's momentum remains weak, allowing gold to stabilize.
- Geopolitical tensions continue to support gold's appeal as a safe-haven asset amid ongoing conflicts.
Gold (XAU/USD) picked up modest traction in early European trading on Friday, pushing above $4,218 after rebounding from its weekly low near $4,175. The move reflects steady, but cautious, buying as traders focus on the upcoming US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge.
With expectations calling for headline inflation at 2.8% and core at 2.9%, markets are reluctant to take aggressive positions before the data lands. Despite the hesitation, gold is holding firm and is on track to limit its weekly losses—provided inflation doesn’t surprise to the upside.
Cautious Sentiment Ahead of PCE Release
The muted tone in gold largely stems from traders waiting for clarity on the Fed’s policy path. Even with recent volatility, markets continue to lean toward a 25-bp rate cut, with futures pricing showing an 85% probability.
Labor market data added another layer of complexity. Planned job cuts in November fell 53%, and Initial Jobless Claims dropped to 191K, the lowest in more than three years.
Typically, strong employment figures would pressure gold by supporting the US Dollar. This time, however, the dollar struggled to capitalize, allowing gold to stabilize.
Key trader takeaways:
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PCE release will determine short-term direction.
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Dollar momentum remains soft despite upbeat labor data.
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Rate-cut expectations continue to cushion gold prices.
Geopolitical Tensions Sustain Safe-Haven Demand
Gold also continues to benefit from ongoing geopolitical tensions. Russian President Vladimir Putin rejected essential elements of a US proposal to end the conflict in Ukraine and reiterated demands for Ukrainian withdrawal from the Donbas region. These developments preserved a cautious tone across markets, supporting gold’s appeal as a safe-haven asset.
Gold (XAU/USD) Technical Analysis
GOLD is trading near $4,225, staying firmly within a rising channel that has held since mid-November. Support at $4,180 remains intact, reinforced by the 20-EMA at $4,208. Recent 4H candles show higher lows—an encouraging sign that buyers are defending trendline support.
Immediate resistance sits at $4,264, followed by a stronger ceiling at $4,321. A sustained close above $4,264 would open the path toward $4,320–$4,380.
On the downside, a break below $4,180 exposes $4,130 and then $4,083, signaling a potential shift out of the channel.
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