Gold price (XAU/USD) clings to Wednesday’s losses near $3,985 during the European trading session on Thursday.
According to the CME FedWatch tool, the odds of the Fed hiking interest rates this year are almost 82%.
The scenario of higher interest rates by the Fed bodes poorly for non-yielding assets, such as Gold.
The US core PCE inflation, which is the Fed’s preferred inflation gauge, is expected to arrive higher at 3.4% from 3.3% in April.
On a monthly basis, the underlying inflation is estimated to have risen 0.3%, faster than the previous reading of 0.2%.
Gold price (XAU/USD) clings to Wednesday’s losses near $3,985 during the European trading session on Thursday. The yellow metal remains under severe pressure as traders seem confident that the next monetary policy move by the Federal Reserve (Fed) will be on the upside.
According to the CME FedWatch tool, the odds of the Fed hiking interest rates this year are almost 82%. While the possibility of at least two interest rate hikes is 42.2%.
The scenario of higher interest rates by the Fed bodes poorly for non-yielding assets, such as Gold.
Hawkish Fed bets have escalated due to accelerating both headline and the core inflation in the past few months due to higher energy prices.
For fresh cues on the current status of inflation, investors await the United States (US) Personal Consumption Expenditure Price Index (PCE) data for May, which will be published at 12:30 GMT. The US core PCE inflation, which is the Fed’s preferred inflation gauge, is expected to arrive higher at 3.4% from 3.3% in April. On a monthly basis, the underlying inflation is estimated to have risen 0.3%, faster than the previous reading of 0.2%.
Gold technical analysis
XAU/USD trades lower at around $3,985.26, extending its slide below the short-term trend as the 20-day Exponential Moving Average (EMA) at roughly $4,247 now caps the upside.
The near-term tone remains bearish, with price entrenched well under this dynamic barrier, while the Relative Strength Index (RSI) around 30 sits in oversold territory, hinting that downside momentum is stretched but not yet reversed.
On the topside, initial resistance is at the March 23 low near $4,100, followed by the 20-day EMA near $4,247, and a daily close above this level would be needed to ease immediate selling pressure and suggest a more meaningful recovery attempt. On the downside, the Gold price could extend its decline towards the October 28 low at $3,886.62, followed by the September 23 high at $3,791.12.
(The technical analysis of this story was written with the help of an AI tool.)
