Gold price edged down on Friday as investors reacted to US inflation data. The commodity was down by 1.1% and traded at $2,844 per ounce at the spot market at press time. A second successive daily loss defies the escalating tariff jitters which has recently drawn the Eurozone in.
US Core Personal Consumption Expenditure (PCE) price index came in at 2.6% year-on-year in January, in line with the forecast figure. The monthly core PCE (excluding food and energy prices) was at 0.3%. Headline PCE was at 2.5%, similarly matching median projections.
The PCE is the Federal Reserve’s preferred inflation gauge, and the latest figures raise the likelihood that interest rates will remain elevated for longer. Such as a scenario presents downward pressure on gold price in the coming weeks.
However, US President Donald Trump’s threats of a 25% tariff on EU imports could trigger a tumultuous economic downturn that could raise the demand for safe haven gold. Fresh volatility is likely to kick in starting next week when US tariffs kick off against Canada and Mexico.
The coming weeks also set up the platform for increased demand for gold from central banks seeking to cushion economies against a tariff ecosystem. China already showed signs of renewed appetite for the commodity with its first purchase in six months in January, and more central banks are likely to join.
Gold Price Prediction
Gold price pivots at $2,860 and action below that level signifies control by the sellers. The yellow metal will likely find the first support at $2,830. A stronger downward momentum will break below that level and could open the path to test the second support at $2,811.
On the other hand, moving above $2,860 will signal the onset of upward momentum. With the buyers in control, the first resistance will likely be at $2,877. Breaking above that level will invalidate the downside narrative and could potentially extend gains to test the next hurdle at $2,894.
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