Gold News: Will Upcoming PCE Inflation Data Reinforce Gold’s Appeal?

Gold Holds Ground Near Record Highs

Gold (XAU/USD) settled at $2,936.26 last week, posting a 1.87% gain and achieving its eighth consecutive weekly increase​. The metal reached a fresh all-time high of $2,954.96 on Thursday before edging lower on Friday as investors booked profits​​. Despite the pullback, gold’s bullish momentum remains intact, supported by strong safe-haven demand amid escalating U.S. trade policies and inflation concerns.

Trump’s Tariff Moves Propel Gold Demand

U.S. President Donald Trump’s aggressive trade policies have been a critical driver of gold’s rally. His latest proposals include 25% tariffs on auto imports, semiconductors, and pharmaceuticals, as well as new duties on lumber and forest products​​. These add to previous tariffs, including 10% on Chinese imports and 25% on steel and aluminum​​. The resulting economic uncertainty has pushed investors into gold as a hedge against market instability, with Goldman Sachs raising its year-end price target to $3,100 per ounce​.

Fed Inflation Concerns Support Gold’s Safe-Haven Appeal

The Federal Reserve’s cautious approach to monetary policy is bolstering gold prices. Minutes from the Fed’s January meeting revealed a steady interest rate policy between 4.25% and 4.5%, with policymakers citing inflation risks tied to Trump’s tariffs​. With the central bank reluctant to cut rates, the appeal of non-yielding assets like gold remains strong. Traders are eyeing next week’s core Personal Consumption Expenditures (PCE) deflator data, which could impact market sentiment around inflation and interest rates​.

Geopolitical and Economic Data to Influence Market Sentiment

Beyond trade policy, geopolitical risks and economic data are also critical for gold’s outlook. Potential U.S.-Russia peace talks, possibly hosted by Saudi Arabia, could affect safe-haven flows​. Meanwhile, upcoming U.S. data releases, including consumer confidence, new home sales, and inflation figures, could influence the Federal Reserve’s policy stance​. Strong economic indicators might impact gold’s performance if they alter expectations for interest rate changes.

Market Forecast: Bullish Outlook as Key Data Looms

Gold’s broader trend remains bullish, with the $3,000 level as a critical psychological target. Strong safe-haven demand, driven by escalating U.S. trade tensions and persistent inflation risks, supports further gains. Next week, traders will focus on the core Personal Consumption Expenditures (PCE) deflator, with economists expecting a 0.3% increase​.

Additional key reports include U.S. consumer confidence on Tuesday and new home sales on Wednesday, which could influence market sentiment and the Federal Reserve’s policy stance. If the PCE data confirms elevated inflation pressures, it could reinforce gold’s appeal as a hedge against rising prices and economic uncertainty. Given the current macroeconomic backdrop, gold is well-positioned for continued upside as investors seek stability and inflation protection.

Technically, the main trend is up. A trade through $2954.96 will signal a resumption of the uptrend. The trend will change to down on a move through $2536.85, but this is highly unlikely. Nonetheless, if profit-taking persists this week, it could lead to a pullback into the 50% level at $2745.91 over the near-term.

More Information in our Economic Calendar.