Gold (XAU/USD) is trading with a moderate positive tone on Friday, following a soft US inflation report that has impacted the US Dollar. Despite a recent sell-off, Gold is struggling to recover significantly from one-month lows. The market’s focus is on key economic data influencing the precious metal’s movement.
Key Insights on Gold Performance
Gold is showing resilience despite ongoing pressure from a strong US Dollar. The recent US Personal Consumption Expenditures (PCE) Price Index data indicates lower-than-expected inflation, boosting selling pressure on the US Dollar.
US Inflation and Gold’s Response
In November, US PCE Inflation increased by 0.1%, below the expected 0.2% rise. The yearly rate advanced to 2.4% from 2.3%, still below market expectations of 2.5%. Core PCE dropped to 0.1% from 0.3% in October, holding the annual inflation rate steady at 2.8%, below the expected rise to 2.9%.
Economic Data Influences
On Thursday, upward revisions to the US GDP and lower-than-expected Jobless Claims bolstered the Federal Reserve’s stance for potential rate hikes in 2025. These factors, coupled with higher US yields, continue to suppress Gold’s recovery.
Market Dynamics Affecting Gold
XAU/USD has shown higher trading volumes for two consecutive days but faces challenges due to steady US Treasury yields above 4.50%. This has resulted in limited upside momentum as traders remain cautious ahead of the upcoming key inflation report.
Technical Analysis
Gold is experiencing a corrective rebound, but the overall trend continues to lean bearish. XAU/USD struggles to maintain levels above $2,600. The Relative Strength Index (RSI) on the 4-hour chart remains below 50, indicating bearish momentum.
Support and Resistance Levels
Immediate resistance is seen at $2,605, with a crucial zone between $2,625-$2,630.
Conclusion
Gold continues to trade with a moderate positive tone despite bearish pressures influenced by economic factors such as inflation and interest rate expectations. For real-time updates, visit Daily Gold Signal and explore the latest insights on the Gold market. For daily updates, check out Daily Gold Update.
