Gold prices remain under $3,300 as traders eye the US PCE Price Index for clues on Federal Reserve rate cuts. Learn how the US Dollar, geopolitical risks, and tariffs impact gold.
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Why Are Gold Prices Struggling Below $3,300?
Gold prices (XAU/USD) are stuck below $3,300 during Friday’s early European trading session. The metal is facing downward pressure but isn’t seeing strong selling. Traders are waiting for the US PCE Price Index, a key inflation report, to get hints about the Federal Reserve’s next moves on interest rates. This report could shake up the markets and influence gold’s direction.
US Dollar Strength and Federal Reserve Expectations
The US Dollar (USD) is gaining some buyers as traders adjust their positions before the inflation data release. A stronger dollar often pushes gold prices down since gold is priced in USD. However, many believe the Federal Reserve might cut interest rates further in 2025 due to concerns about the US economy and rising national debt. Lower interest rates could limit the dollar’s strength and provide some support for gold, which doesn’t pay interest.
Tariffs and Global Tensions Boost Gold’s Safe-Haven Appeal
On Thursday, a US appeals court brought back tariffs introduced by former President Donald Trump, creating uncertainty in the markets. This has made investors cautious, leading to a softer stock market. Meanwhile, ongoing issues like the Russia-Ukraine war and Middle East conflicts are keeping gold attractive as a safe-haven asset. These factors help prevent gold prices from falling too sharply.
What’s Next for Gold Prices?
With so many factors at play, gold’s next move is uncertain. Traders should avoid betting on a big price drop until there’s clear evidence of stronger selling. The US PCE Price Index could provide the spark for gold’s next big move, so keep an eye on it!
