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The price of gold fell below 3,300 USD per troy ounce on Friday, closing the week with a loss of approximately 1%.
 

Key drivers behind gold’s movement

Investors remain cautious ahead of today’s US PCE inflation report, which could offer fresh clues on potential Federal Reserve rate adjustments.

On Thursday, gold prices gained nearly 1% after an appeals court temporarily upheld tariffs imposed during Donald Trump’s presidency. This followed a ruling by a US trade court a day earlier, which had blocked the tariffs, deeming their implementation unlawful.

San Francisco Fed President Mary Daly reiterated that the Fed could still deliver two rate cuts this year, as projected in March. However, she emphasised that rates must hold steady for now to achieve the 2% inflation target.

Gold faced volatility in May as global risk sentiment improved, reducing demand for safe-haven assets. Hopes of a resolution in US trade disputes spurred investors back into equity markets.

Technical analysis: XAU/USD

H4 Chart:

(Click on image to enlarge)

• The market completed a correction wave to 3,246, followed by an upward impulse to 3,331
• Currently, a downward pullback towards 3,280 is forming, with consolidation around 3,320
• A downside breakout could extend losses to 3,200, while an upside breakout may fuel a rally towards 3,388, exhausting the bullish wave
• A subsequent downtrend towards 3,060 is anticipated
• MACD confirmation: The signal line has exited the histogram zone, indicating a firm upward trend

H1 Chart:

(Click on image to enlarge)

• The upward wave to 3,331 has concluded, with a correction to at least 3,255 expected today
• Thereafter, another upswing towards 3,355 (potentially extending to 3,388) may follow, although this is viewed as a corrective pullback within the broader downtrend
• Once complete, a new decline towards 3,222 (possibly 3,060) is likely
• The stochastic indicator supports this view: The signal line is below 20, rising sharply towards 80

Conclusion

Gold’s near-term direction hinges on breakouts from the current range, with technical indicators suggesting further volatility ahead.

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