Gold is trading above $4,000 on Friday following a pullback in the US Dollar after March PCE inflation data aligned with market expectations, easing pressure on the Federal Reserve to raise interest rates in the near term. The softer Dollar provided temporary relief for the precious metal, which had been under sustained selling pressure throughout the month.
Despite Friday’s gains, gold remains on track for its fourth consecutive monthly decline as elevated Treasury yields and reduced safe-haven demand continue to weigh on the yellow metal. The PCE report showed inflation remains sticky but not accelerating, giving traders confidence that aggressive Fed tightening is unlikely in the immediate future. This has allowed gold to recover some losses but hasn’t reversed the broader bearish trend that has characterized trading since the start of the year.
The precious metal faces resistance from persistently hawkish Fed rhetoric and ongoing strength in risk assets, which have reduced investor appetite for traditional hedges.
FXnCO Insight
Traders should watch upcoming Fed speakers closely, as any hawkish commentary could quickly reverse gold’s modest recovery and push prices back toward support levels.
Source: FXStreet