Gold Shines Bright: Prices Surge Post PCE Data Amid Rate Pause Sentiments

Gold prices gained above $2800 after US PCE data. It hit an intraday high of $2808.57  and currently trading around $2805.78.

Core PCE Insights

core Personal Consumption Expenditure Price Index increased by 0.2% in December 2024, just as forecasted but also higher than the 0.1% logged in November. This index accounts for how much the prices of goods and services, excluding food and energy, are increasing and also reflects clearer inflation patterns. Year-on-year, the core PCE inflation remains constant at 2.8% and is consistent with what analysts had forecasted. The Federal Reserve pays great attention to the index because it determines decisions for interest rates and monetary policy at around a 2% inflationary target. This index of 0.2% shows stability in price trends and is also important in trying to understand what is happening to the U.S. economy concerning inflation.

Rate Pause Sentiments Climb

According to the CME Fed Watch tool, the chances of a rate pause in the Mar 19th 2025 meeting have increased to 82% up from 72.40% a week ago.

Technical Analysis: Key Levels and Trading Strategy

Gold prices are holding above short-term moving averages 34 EMA and 55 EMA and long-term moving averages (200 EMA) in the 4-hour chart. Immediate support is at $2745 and a break below this level will drag the yellow metal $2720/$2700/$2670/$2660/$2650/$2,630,$2600/ $2,570, $2,559, $2,536, and eventually $2,500. The near-term resistance is at $2810, with potential price targets at $2825/$2860. It is good to buy on dips around $ 2760-61 with a stop-loss at $2740 for a target price of $2825/$2860.