Gold Slips After Data; Traders Now Look to Friday’s PCE Inflation Report
Gold turned lower Thursday, down about $10.00 on the day, after reversing earlier gains following stronger-than-expected U.S. economic data. The metal had been holding just above minor pivot support at $3709.61, attracting dip buyers, but sellers stepped in as yields ticked higher and rate cut odds eased. Without a strong catalyst, price action remains rangebound, with the real test coming Friday.
At 14:51 GMT, XAU/USD is trading $3725.28, down $10.88 or 0.29%.
Jobless Claims and GDP Beat Push Back on Dovish Narrative
Initial weekly jobless claims came in at 218,000, below both the prior week’s 232,000 and the 235,000 consensus. While not a game-changer, it was enough to shake out some longs. At the same time, Q3 GDP was revised higher to 3.8% from 3.3%, adding to the hawkish tone.
Yields moved up in response. The 10-year hit 4.185%, while the 2-year climbed to 3.655%. That firming in yields clipped gold’s earlier rally and helped the dollar find its footing.
Powell Talks Caution, Daly Signals More Cuts
Despite Thursday’s data, Fed Chair Powell’s comments earlier this week remain fresh in traders’ minds. He flagged labor market risks as outweighing inflation concerns—a shift that supports easing. Meanwhile, San Francisco Fed’s Mary Daly voiced “full support” for the last 25 bp cut and signaled openness to further reductions.
Markets still see an 81% chance of an October cut, down from 90% pre-data. So while the trend has nudged slightly more hawkish, the broader tone remains gold-friendly.
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See all Gold forecastsPCE Inflation in Focus: Will It Fuel a Breakout or Breakdown?
Friday’s PCE print (due 12:30 GMT) is the big swing factor. Expectations are for a 0.3% monthly and 2.7% annual rise. A hotter print could lift the dollar and pressure gold again. A miss would reinforce rate cut bets and may help the metal bounce back toward $3791.26 resistance.
Safe-haven demand remains in the background, especially with government shutdown headlines still floating around, but unless that erupts into real risk-off, it’s all about inflation.
Market Outlook: Consolidation Until PCE Clears the Fog
Gold’s uptrend remains intact by swing and moving average standards, but bulls need to hold $3709.61 to keep control. A close below opens the door to $3627.96–$3612.83 support. Breakout traders are eyeing $3791.26 for upside momentum. Until PCE clears the fog, we’re likely stuck chopping inside that range.
More Information in our Economic Calendar.
