What's next for Gold after $2,100 record? PCE report in sight

What's next for Gold after $2,100 record? PCE report in sight

As attention in the financial markets shifts towards the upcoming US Personal Consumption Expenditures (PCE) inflation report set for release on Friday, its significance becomes apparent. This report holds the potential to provide crucial insights into future monetary policy adjustments. Moreover, its outcomes could ripple across various sectors, influencing the strength of the US Dollar and impacting both the stock market and the value of gold.

Looking at the daily chart for the XAU/USD pair reveals a potential upward tilt in risk. Notably, gold has recently achieved a historic milestone, surging to an all-time high of over $2,100 per ounce. While a minor correction followed, this event remains undeniably significant.

Within this context, the Core Personal Consumption Expenditures (PCE) Price Index, the favored inflation measure of the US Federal Reserve, takes center stage. The annual PCE inflation rate in the US dipped to 3% in October 2023, a level not seen since March 2021. Projections for this Friday’s PCE report hint at a potential fall to either 2.8% or 2.9%. Notably, a failure to reflect moderation in these figures would signal that the economy is still operating at an elevated temperature, potentially indicating that any policy stance adjustment could be premature.