Gold (XAUUSD) Price Forecast: Will PCE Data Trigger a Gold Breakout or Breakdown?

Gold Consolidates as Traders Brace for PCE Data and Dollar Strength

Gold prices edged lower on Friday, consolidating within a tight range as traders positioned cautiously ahead of the U.S. Personal Consumption Expenditures (PCE) data — the Federal Reserve’s preferred inflation gauge.

Gold hovered between key 50% retracement levels at $3277.91 and $3310.48, with the 50-day moving average at $3228.00 acting as critical long-term support.

At 12:02 GMT, XAU/USD is trading $3289.45, down $28.16 or -0.85%.

Dollar Strength Pressures Gold as Inflation Data Looms

The U.S. dollar index (DXY) rose 0.3% on the session, heading for a weekly gain. A stronger dollar typically makes gold more expensive for non-U.S. buyers and has added downside pressure to XAU/USD. The PCE data, due at 12:30 GMT, is forecast to show a 2.2% rise in April, slightly lower than March’s 2.3% increase.

Analysts suggest gold may not see a sharp reaction unless there’s a major surprise in the inflation print. Julius Baer’s Carsten Menke noted the market appears jittery, signaling potential for near-term volatility. KCM Trade’s Tim Waterer added that traders are hesitant to build long gold positions ahead of the release.

Gold Remains Supported by Technicals but Faces Headwinds

Technically, gold remains guided higher by the uptrending 50-day moving average. A decisive breakdown below $3277.91 could trigger a retest of the $3228.00 level. On the upside, sustained momentum above $3310.48 could open the door to a challenge of last week’s high at $3366.02, with the all-time high at $3500.20 still in sight.

However, sentiment remains cautious. Treasury yields were little changed Friday, with the 10-year at 4.422% and the 2-year at 3.939%, as investors balanced rate expectations against geopolitical tensions and a renewed focus on tariffs. A federal appeals court temporarily reinstated sweeping tariffs introduced under former President Donald Trump, adding another layer of uncertainty to the U.S. economic outlook.

Fed Rate Cut Expectations and Trade Uncertainty Complicate Outlook

Markets still price in around 50 basis points of Fed rate cuts before year-end, with the first likely in October. While gold traditionally benefits from a low-rate environment, any hawkish surprise in inflation or trade-induced economic strain could complicate those expectations.

The revival of Trump-era tariffs—possibly through alternative legal channels—adds a risk premium to gold, which often attracts safe-haven demand during trade tensions. The administration is reportedly eyeing the Trade Act of 1974 to impose up to 15% tariffs for 150 days.

Gold Prices Forecast: Neutral Bias with Downside Risk If Support Breaks

With gold stuck between key technical levels and macroeconomic events in focus, traders are awaiting direction. A bullish breakout above $3310.48 could invite fresh momentum, but failure to hold $3277.91 raises the risk of a sharper correction toward $3228.00.

Until the inflation data confirms or challenges current Fed rate expectations, gold prices are likely to remain rangebound with a slight bearish tilt.

More Information in our Economic Calendar.