Gold (XAU/USD) at $2,345: Fed Rate Speculation and Core PCE Data Impact Prices

Gold (XAU/USD) is currently priced at $2,345.165, down 0.03%. Gold prices have modestly advanced due to a softer US dollar and lower US yields.

Traders are betting on a potential Federal Reserve interest rate cut following weaker US GDP data, which showed the economy expanded at an annualized rate of 1.3% in Q1, down from 1.6%. This economic environment supports the precious metal, traditionally seen as a safe-haven asset.

Upcoming Economic Indicators

Later today, traders will focus on the US April Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure.

🚨🚨The US personal consumption expenditure (PCE) price data for April will be released today. #pce #xauusd #fed

As the most favored inflation indicator of the Federal Reserve, the year-on-year change of the core PCE price index has a greater impact on policymakers. #USA

The…

— Jennie (@Jennie_XAUUSD) May 31, 2024

The Core PCE is expected to rise by 0.3% MoM and 2.8% YoY. Higher-than-expected inflation data could bolster the US dollar, limiting the upside for gold prices.

Geopolitical and Market Dynamics

Geopolitical tensions, including Israel’s control over Gaza’s land border, add a layer of uncertainty that could influence gold prices. Additionally, the US weekly Initial Jobless Claims rose to 219K, surpassing the market consensus of 218K.

Comments from Fed officials, such as Chicago Fed President Austan Goolsbee and New York Fed President John Williams, indicate ongoing concerns about inflation and a strong labour market, suggesting that interest rate cuts may not occur soon.

Gold Price Forecast: Technical Outlook

Gold is currently priced at $2,345.165, down 0.03%. The pivot point, marked by the green line, is at $2,337.42. Immediate resistance levels are at $2,350.20, followed by $2,366.51 and $2,379.32.

On the downside, immediate support is at $2,324.80, with further supports at $2,307.40 and $2,291.54. The 50-day Exponential Moving Average (EMA) stands at $2,335.136, indicating potential resistance.

The Relative Strength Index (RSI) is at 47, suggesting neutral momentum.The technical outlook for gold is bearish below the pivot point of $2,337.42.

A break above this level could shift the bias to bullish, targeting higher resistance levels. Conversely, staying below $2,337.42 may lead to testing lower support levels, maintaining downward pressure.