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
Core PCE inflation eased to 2.1% YoY in April, slightly below forecasts (2.2%).
Powell maintains cautious stance, signaling no rush to cut rates despite softening price pressures.
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
Dollar Index (DXY) up 0.3% last week, pressuring gold’s appeal for foreign buyers.
10-year Treasury yields near 4.42%, reducing gold’s attractiveness as a non-yielding asset.
3. Tariff Uncertainty Adds Volatility
Trump’s proposed tariffs face legal battles, creating market uncertainty.
Potential 15% tariffs under 1974 Trade Act could reignite safe-haven gold demand if implemented.
4. Mixed Physical Gold Demand Trends
Indian demand slows as wedding season ends and local prices stay elevated.
Swiss gold imports surge (63 metric tons in April), signaling strong European interest.
Chinese & Indian imports lag behind last year’s levels.
Gold Price Forecast: Cautiously Bullish Outlook
Technical Levels to Watch
Support: $3,166 (short-term), $3,018 (intermediate)
Resistance: Record high at $3,500
Long-term trend remains bullish, with the 52-week MA holding at $2,745.
Upcoming Catalysts
Fed Chair Powell’s testimony (Market impact: High)
U.S. Non-Farm Payrolls (NFP) report (Friday)
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
