Gold Rebounds After Recent Dip, But Gains Capped by Easing Trade Tensions
Gold prices climbed on Wednesday as investors took advantage of lower prices following a recent pullback. However, the precious metal’s upside was limited by easing US-EU trade tensions, with markets now focused on the upcoming US Core PCE inflation data for fresh clues on the Federal Reserve’s interest rate path.
Key Gold Price Movements
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Spot gold rose 0.3% to $3,308.99 per ounce, recovering from a 1% drop in the previous session.
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US gold futures edged up 0.2% to $3,308.30.
What’s Driving Gold Prices?
1. Dip Buying Supports Gold
After gold briefly dipped below $3,300, bargain hunters stepped in, providing a floor for prices.
Tim Waterer, Chief Market Analyst at KCM Trade, noted:
*“Gold’s dip below $3,300 attracted some buyers. However, the broader market remains upbeat due to easing US-EU trade tensions, which is limiting gold’s upside for now.”*
He added:
*“If support between $3,250-$3,280 holds, gold could make another run toward $3,400 if risk sentiment weakens.”*
2. US-EU Trade War Fears Ease
President Donald Trump delayed imposing 50% tariffs on the EU, pushing the deadline to July 9 to allow negotiations. This reduced safe-haven demand, capping gold’s rally.
3. Focus Shifts to US PCE Data & Fed Rate Cut Expectations
Markets are now awaiting the US Core PCE Price Index (Friday’s release), the Fed’s preferred inflation gauge, for insights on future interest rate cuts.
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The Fed has held rates at 4.25%-4.50% since December, awaiting more clarity on inflation and trade impacts.
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US consumer confidence rebounded in May, ending a five-month decline, as the US-China trade truce provided relief.
4. Silver, Platinum, and Palladium Performance
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Spot silver held steady at $33.31 per ounce.
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Platinum rose 0.4% to $1,084.07.
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Palladium dipped 0.2% to $976.22.
Gold Outlook: What’s Next?
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Short-term direction hinges on US PCE data – A softer reading could boost Fed rate cut bets, supporting gold.
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Nvidia earnings (Friday) could also influence market risk appetite, impacting gold’s safe-haven appeal.
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If $3,250-$3,280 support holds, gold could retest $3,400 if risk-off sentiment returns.
Key Takeaways for Traders
✅ Gold rebounds on dip-buying but faces resistance from easing trade tensions.
✅ US PCE data & Fed rate expectations remain critical for gold’s next move.
✅ Watch $3,250-$3,280 support – A break lower could trigger deeper declines.
Stay tuned for more updates on gold price trends and market-moving events.
