Gold price holds steady below $3,300 as traders await the upcoming release of the US PCE Price Index

Gold (XAU/USD) is consolidating just below the $3,300 level during Friday’s European session as traders adopt a cautious stance ahead of the release of crucial US inflation figures. With investors waiting on the sidelines, the US Dollar (USD) has regained some positive momentum through repositioning trades, which has slightly dampened demand for gold. However, a combination of factors is preventing aggressive selling, helping to limit deeper losses in the commodity.

On Thursday, a federal appeals court paused a separate trade court ruling and reinstated former President Donald Trump’s tariffs, injecting additional uncertainty into the markets and weighing on investor sentiment. Alongside this, ongoing geopolitical tensions—including the prolonged Russia-Ukraine conflict and unrest in the Middle East—continue to provide support to gold as a safe-haven asset. Moreover, market expectations that the Federal Reserve (Fed) will implement further rate cuts are capping the USD’s strength and offering additional tailwinds for gold prices.

Daily Market Update: Gold Faces Selling Pressure Amid Modest USD Strength, but Downside Remains Limited

• The sharp overnight retracement in the US Dollar has seen little follow-through as sellers remain hesitant ahead of the release of the critical US Personal Consumption Expenditures (PCE) Price Index later today. The appeals court’s temporary reinstatement of Trump’s tariffs followed a previous trade court ruling that declared them illegal and ordered an immediate block, creating a tug-of-war in the markets.
• Further complicating the outlook, The Wall Street Journal reported that the Trump administration is considering invoking a law that would allow tariffs of up to 15% for 150 days. On the geopolitical front, Kremlin spokesman Dmitry Peskov confirmed that Russia has received a response from Ukraine regarding a proposal for peace talks scheduled in Istanbul next week. Meanwhile, a White House spokeswoman announced that Israel has agreed to a US ceasefire proposal, although Hamas rejected the terms, leaving geopolitical risks unresolved.
• Investors are pricing in the possibility that the Fed will support the economy by cutting interest rates twice by the end of the year, each by 25 basis points. However, the May FOMC meeting minutes, released Wednesday, highlighted a consensus to maintain a cautious, wait-and-see approach amid uncertainties surrounding the economic outlook and trade policies.
• Federal Reserve officials have offered mixed signals: Chicago Fed President Austan Goolsbee suggested that rates could decline if a trade deal resolves tariff issues; San Francisco Fed President Mary Daly supported two rate cuts if inflation declines and the labor market remains strong, while Dallas Fed President Lorie Logan emphasized a balanced risk outlook with readiness to respond as needed.
• Following his meeting with the President on Thursday, Fed Chair Jerome Powell reiterated that monetary policy decisions will be guided strictly by incoming economic data.
• Consequently, today’s PCE inflation report will be pivotal in shaping expectations for the Fed’s rate-cut trajectory, influencing the USD and potentially providing fresh momentum for gold prices moving forward.

Gold price may accelerate its intraday decline if it decisively breaks below the immediate support at $3,280.

Technically, the recent failure to breach the $3,325–3,326 resistance level, followed by a drop below $3,300, favors bearish momentum for XAU/USD. Additionally, negative signals from oscillators on the 4-hour chart support the likelihood of further intraday downside. This could lead to continued weakness toward the key support at $3,280, with a potential test of the overnight swing low near $3,246–3,245. A clear break below this level could open the door to deeper losses, targeting the $3,200 psychological level.

Conversely, the $3,325–3,326 zone is likely to remain a strong resistance area, ahead of a larger supply zone around $3,345–3,350. A sustained move above this range would invalidate the bearish outlook and could spark a short-covering rally, allowing gold to reclaim the $3,400 level. If momentum continues, the next resistance to watch would be near $3,432–3,434.