Gold Remains on a Bearish Path
Gold prices remained bearish on Thursday, holding near their lowest level since November 2025. Although the US dollar weakened slightly, gold was unable to capitalize on this momentum for a strong rebound. Selling pressure persisted as the market remained cautious ahead of the release of US Personal Consumption Expenditures (PCE) inflation data.
Fundamentally, expectations for a Federal Reserve interest rate hike remain a major drag on gold. According to CME FedWatch, the market still estimates a greater than 80% chance that the Fed will raise interest rates before the end of the year. This makes gold less attractive because the precious metal offers no yield, while dollar-based assets and US government bonds still offer attractive yields.
On the other hand, the likelihood of an interest rate hike has indeed diminished slightly as inflation has begun to ease following the decline in oil prices. However, this drop in expectations has not been enough to significantly boost gold. The US dollar also continues to receive support from safe-haven sentiment after the sell-off in global technology stocks at the start of the week prompted investors to seek safer assets. Technically, the gold price breaking through and holding below the psychological level of US$4,000 strengthens short-term bearish pressure. As long as the price struggles to stabilize above this level, any rebound attempt could potentially be viewed as a selling opportunity by the market. The next support area is around US$3,950 to US$3,900, while initial resistance is around US$4,000 to US$4,050.
The market's primary focus now lies on the US Consumer Price Index (PCE) data. If inflation data is hotter than expected, expectations for a Fed rate hike could strengthen, risking further weakness for gold. However, if the PCE shows inflation is starting to level off, gold has the potential for a technical recovery, although the underlying trend remains fragile as long as the US dollar remains strong and the market has not returned to aggressively investing in precious metals. (Asd)*
Source: Newsmaker.id
