Gold's Perfect Storm: Strong Data & Rate Pause Bets Drive Rally Above $3300

Gold recovered above $3300 after minor profit booking. It hit an intraday high of $3334  and is currently trading around $3327.

According to May 2025, US flash PMI statistics, the manufacturing and service industries grew more than anticipated. The Manufacturing PMI jumped to a three-month high of 52.3, pointing to a strong expansion powered by local demand, whereas the Services PMI increased to 52.3, representing the fastest growth in two months driven by quicker new order inflows.

Initial jobless claims for the week ending May 17, 2025, fell to a four-week low of 227,000, indicating a healthy labor market despite trade-related economic uncertainties. Although economists predict claims to increase later in the year, present data indicate consistent job retention by companies.

Rate Hike Expectations: Market Sentiment Shifts

According to the CME Fed Watch tool, the chances of  rate pause in June 18th 2025 meeting have increased to 94.70% from 91.40% a week ago.

Technical Analysis: Key Levels and Trading Strategy

Gold prices are holding above short-term moving averages 34 EMA and above 55 EMA and above long-term moving averages (200 EMA) in the 4-hour chart. Immediate support is at $3310 and a break below this level will drag the yellow metal to $3300/$3279/3264/$3230/$3200/$3165/$3135/$3100/$3000. The near-term resistance is at $3350 with potential price targets at $3365/$3378/$3400/$3415/$3465/$3500.

It  is good to buy on dips around $3300  with a stop-loss  at $3270 for a target price of $3400.