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
Spot gold rose 0.3% to $3,308.99 per ounce, recovering from a 1% drop in the previous session.
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.
The Fed has held rates at 4.25%-4.50% since December, awaiting more clarity on inflation and trade impacts.
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
Spot silver held steady at $33.31 per ounce.
Platinum rose 0.4% to $1,084.07.
Palladium dipped 0.2% to $976.22.
Gold Outlook: What’s Next?
Short-term direction hinges on US PCE data – A softer reading could boost Fed rate cut bets, supporting gold.
Nvidia earnings (Friday) could also influence market risk appetite, impacting gold’s safe-haven appeal.
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.
