Gold Drops Below $3,300 Ahead of US Core PCE Report and Trade Truce Optimism

Gold Drops Below $3,300 Ahead of US Core PCE Report and Trade Truce Optimism

Gold (XAU/USD) continues its decline on Friday, extending weekly losses as optimism around a US-China trade agreement improves global risk sentiment. The metal is trading below the $3,300 mark, with traders positioning cautiously ahead of core PCE inflation data and Michigan Consumer Sentiment Index later today.

Gold Weakens on Trade Truce & Risk Sentiment

News that China and the United States are closing in on a formal trade truce has diminished demand for traditional safe-haven assets like gold. As investors rotate into riskier assets, XAU/USD has come under consistent selling pressure.

Technical Levels & RSI Signal More Weakness

• Gold is currently priced around $3,295, with key support near $3,280.
• The Relative Strength Index (RSI) shows further downside potential, indicating a deepening correction.

Core PCE Inflation in Focus

Markets are now focused on the release of the core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure.

• Why it matters: The data is critical for assessing future Fed rate policy.
• A higher-than-expected print could delay rate cuts and pressure gold lower.
• A softer number could trigger a rebound in gold as real yields decline.

Outlook

Gold traders remain sensitive to macroeconomic shifts. If today's PCE data deviates significantly from forecasts, it could lead to swift repositioning in both the USD and gold markets. Until then, gold remains vulnerable below $3,300.

Related Reading: What Core PCE Means for Gold and the Fed’s Rate Path