On Friday, the price of gold (XAU/USD) saw modest gains, supported by a softer US dollar (USD) and decreased US yields. Traders are increasingly betting on the Federal Reserve (Fed) cutting interest rates this year following recent weaker US GDP data. Additionally, ongoing geopolitical risks and conflicts in the Middle East are contributing to the positive sentiment towards gold, as it is traditionally perceived as a safe-haven asset during times of uncertainty.
Later in the day, gold traders will closely monitor the release of the US April Core Personal Consumption Expenditures Price Index (Core PCE), which is considered the Fed’s preferred inflation measure. Analysts project that the Core PCE figure will show a month-on-month increase of 0.3% and a year-on-year increase of 2.8% in April. A higher-than-expected inflation reading could potentially bolster the US dollar and limit the upside for gold prices.
Investors are thus navigating a complex landscape of economic data and geopolitical tensions to determine the future trajectory of gold prices amidst evolving market conditions.
