Gold declined ahead of PCE data, poised for weekly loss

Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

Gold prices edged lower on Friday and were on track for a weekly loss, as investors awaited the US PCE inflation report for fresh guidance on the Federal Reserve’s policy outlook.

The short-term outlook remains clouded. A federal court appeal temporarily reinstated Trump’s sweeping tariffs, adding uncertainty to trade policy expectations and potentially providing some underlying support to bullion.

However, Fed officials continued to signal a cautious stance, with San Francisco Fed President Mary Daly and Chicago Fed’s Austan Goolsbee both indicating that interest rates should remain steady for now. This tone supports US Treasury yields and weighs on non-yielding assets like gold.

Geopolitical risks could continue to dampen investor sentiment and support demand for safe-haven assets. In Eastern Europe and the Middle East, tensions remain elevated and could drive demand for gold.

Looking ahead, the PCE data remains a key event for markets. A downside surprise could revive bets on imminent rate cuts and support gold into next week, while stronger inflation would likely reinforce Fed caution and weigh further on the precious metal.