Gold Struggles Near Two-Week Low as Traders Eye US PCE Data

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Gold prices (XAU/USD) are maintaining a bearish tone in the early European session on Friday, trading near the $2,864-2,863 range, just above a two-week low. The US Dollar (USD) is continuing its recovery from a two-month low, driven by expectations that the Federal Reserve (Fed) will stick to its hawkish stance due to persistently high inflation. This has been a key factor putting downward pressure on gold for the second consecutive day.

The decline could also be linked to repositioning ahead of the US Personal Consumption Expenditure (PCE) Price Index, which could influence the Fed's interest rate outlook and determine gold's near-term direction. Meanwhile, uncertainties surrounding US President Donald Trump’s tariff plans, a risk-off sentiment, and a drop in US Treasury bond yields might provide some support to gold, a safe-haven asset. 

From a technical standpoint, the recent drop has pushed gold below the 23.6% Fibonacci retracement level of the December-February rally. Oscillators on the daily chart have started to show negative momentum, supporting the likelihood of further corrective declines from the all-time peak. A break below the $2,856-2,855 zone would reinforce the bearish bias, potentially pushing gold toward the next support near $2,834, followed by the 38.2% Fibonacci level around $2,815-$2,810. If gold drops decisively below the $2,800 level, it could signal the top has been reached, paving the way for further losses.

On the other hand, if gold recovers above the $2,867 level (23.6% Fibonacci), it may face strong resistance around the $2,885 region, followed by the $2,900 mark. A sustained move beyond this could push gold toward the $2,915 level, which now serves as a key support-turned-resistance level. Continued buying pressure could shift the trend in favor of bulls, opening the path back to the all-time high of around $2,956, with an intermediate resistance near $2,934.

Paraphrasing text from "FXSTREET" all rights reserved by the original author