Gold holds above USD 4,200

Today’s markets analysis on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade

Gold was relatively stable today and continued to trade sideways, consolidating above the USD 4,200 level. Weekly performance remained muted, keeping bullion below its recent record highs. While the metal is holding onto its bullish trend, the market could lack strong immediate momentum as traders could stay on the sidelines ahead of the US Personal Consumption Expenditures (PCE) Price Index release.

The delayed PCE report could take centre stage today. With markets already pricing in an 87% chance of a Fed rate cut at next week’s meeting, an upside surprise in inflation data could affect monetary policy expectations and could influence the Fed’s decision. The latter could also introduce some volatility in the gold market.

In this regard, investors are already grappling with a rebound in US yields and a drop in Initial Jobless Claims to a three-year low while the earlier ADP report showed a 32,000 fall in private-sector jobs. So far, these mixed signals have not changed expectations for a cut next week, which remains supportive for gold.

A soft PCE print today, would reinforce that narrative and could trigger a climb, while a hawkish surprise might prompt profit-taking and a retest of support levels. Persistent safe-haven demand, as peace talks stall in Eastern Europe, is another pillar of support, helping maintain gold’s strength as long as rate-cut expectations remain in place.