Gold (XAU/USD) retreated to near $4,610 during the early Asian session on Thursday, pulling back from a three-month high after the release of US Personal Consumption Expenditures (PCE) Price Index data. The US Bureau of Economic Analysis reported that the PCE Price Index inflation remained unchanged at 3.7% year-over-year in July, which was slightly above the market expectation of 3.6%. The core PCE Price Index, excluding food and energy, held steady at 3.3%, matching consensus estimates. On a monthly basis, both the headline and core PCE indices rose by 0.2% in July [1].
Peter Grant, vice president and senior metals strategist at Zaner Metals, noted that gold's price action prior to the data release was largely due to profit taking, and that the PCE data coming in line with expectations led to consolidation within the previous day's range [1]. Following the data, market participants increased their expectations for a Federal Reserve rate hike in September, with the CME FedWatch tool indicating a nearly 38% chance of a 25 basis point hike, up from 36% before the data was released [1].
Analysts at Rabobank highlighted that despite a pronounced rally in US long-dated Treasuries, gold has not shown signs of capitulation, demonstrating resilience even as bond markets react to shifting sentiment [1]. Technical analysis indicates that XAU/USD maintains a bullish near-term bias, trading above the 100-day simple moving average and the 20-day Bollinger middle band. The Relative Strength Index (RSI) at 67.64 suggests strong but stretched upside momentum. Immediate resistance is seen at the 20-day Bollinger upper band at $4,745, while initial support lies near the 100-day SMA at $4,380 and the Bollinger middle band at $4,365 [1].
Traders are now awaiting the upcoming speech by US Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium for further guidance on the interest rate outlook. Any hawkish commentary from Fed officials could put additional pressure on gold in the near term [1].
CONCLUSION
Gold prices pulled back from recent highs as US PCE data reinforced expectations of a potential Fed rate hike in September. While technical indicators remain bullish, market participants are closely watching upcoming Fed commentary for further direction. The resilience in gold despite bond market moves suggests ongoing investor interest, but near-term risks remain tied to central bank signals.