Gold prices fell over 2% last week as traders weighed Fed caution, mixed inflation signals, and renewed tariff uncertainties. With Fed Chair Powell’s testimony and the U.S. Non-Farm Payrolls (NFP) report ahead, will gold recover or extend losses?
Key Factors Impacting Gold Prices This Week
1. Fed Rate Cut Expectations Fade Despite Cooling Inflation
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Core PCE inflation eased to 2.1% YoY in April, slightly below forecasts (2.2%).
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Powell maintains cautious stance, signaling no rush to cut rates despite softening price pressures.
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September rate cut odds slip as strong economic data reduces urgency for Fed easing.
2. Strong U.S. Dollar & High Yields Weigh on Gold Demand
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Dollar Index (DXY) up 0.3% last week, pressuring gold’s appeal for foreign buyers.
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10-year Treasury yields near 4.42%, reducing gold’s attractiveness as a non-yielding asset.
3. Tariff Uncertainty Adds Volatility
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Trump’s proposed tariffs face legal battles, creating market uncertainty.
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Potential 15% tariffs under 1974 Trade Act could reignite safe-haven gold demand if implemented.
4. Mixed Physical Gold Demand Trends
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Indian demand slows as wedding season ends and local prices stay elevated.
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Swiss gold imports surge (63 metric tons in April), signaling strong European interest.
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Chinese & Indian imports lag behind last year’s levels.
Gold Price Forecast: Cautiously Bullish Outlook
Technical Levels to Watch
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Support: $3,166 (short-term), $3,018 (intermediate)
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Resistance: Record high at $3,500
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Long-term trend remains bullish, with the 52-week MA holding at $2,745.
Upcoming Catalysts
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Fed Chair Powell’s testimony (Market impact: High)
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U.S. Non-Farm Payrolls (NFP) report (Friday)
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Any new tariff developments
Final Thoughts
While gold faces near-term pressure from a strong dollar and Fed hesitation, long-term bullish factors remain:
✔️ Geopolitical risks & tariff uncertainty
✔️ High U.S. debt levels
✔️ Potential Fed rate cuts later in 2024
Traders should watch Powell’s comments and NFP data for clues on gold’s next major move.
