TLDR;
- Gold prices declined nearly 2% over the week amid anticipation of key US economic data.
- Investors await the US Personal Consumption Expenditures (PCE) price index for inflation insights.
- Market uncertainties persist due to ongoing US-China trade tensions and tariff developments.
- Technical resistance capped gold’s recovery attempts, fueling short-term selling pressure.
Gold prices have experienced a notable decline this week, dropping close to 2% as investors prepare for the release of crucial US economic data.
The focal point is the Personal Consumption Expenditures (PCE) price index, a preferred inflation gauge closely monitored by the Federal Reserve. Market participants are eager to assess how recent shifts in consumer spending and wage growth reflect broader economic health and inflationary pressures.
The precious metal slid as much as 0.8% on Friday alone, bringing spot gold prices down to around $3,300 per ounce.
This weekly selloff follows a pattern of technical pullbacks, with gold prices twice failing to breach key resistance levels near $3,328. Analysts suggest that traders are cautious, preferring to hold back until the inflation data clarifies the trajectory of US monetary policy and trade-related economic impacts.
Gold’s Safe Haven Status Intact
Despite the recent dip, gold’s appeal as a safe-haven asset remains robust amid continued geopolitical and trade uncertainties. The White House’s recent actions, including new restrictions on chip design software exports to China and the revocation of certain Chinese student visas, have exacerbated tensions between the two economic giants. US Treasury officials have described trade talks with Beijing as “a bit stalled,” underscoring an uncertain outlook.
Further complicating matters, a federal appeals court granted President Trump a temporary reprieve on a legal ruling that threatened his planned tariffs, suggesting that the trade war could intensify again. Such developments are fueling intermittent spikes in demand for gold as investors hedge against the risks of prolonged global trade disputes and inflationary pressures.
Tariff Delays Provide Temporary Relief
Earlier in the week, gold prices also reacted sharply to President Trump’s decision to delay planned tariff hikes on European Union imports. Initially, Trump announced intentions to raise tariffs to 50%, but after discussions with European Commission President Ursula von der Leyen, the US agreed to postpone the increase until July 9.
This tariff delay was welcomed by global markets, with European and US stocks rallying on hopes of easing trade tensions. Consequently, gold prices dropped as investors shifted back toward risk assets, reflecting a temporary reduction in geopolitical risk premiums. However, market analysts caution that the ongoing “tariff ping-pong” and unpredictable trade policy announcements continue to weigh on investor confidence and market stability.
Technical Resistance Caps Gold’s Rebound Attempts
Market technicians have noted that gold prices have repeatedly failed to sustain rallies beyond near-term resistance points. According to Kelvin Wong, senior analyst at Oanda Asia Pacific, the inability of gold to surpass $3,328 twice in recent sessions has triggered technical selling.
This price behavior indicates short-term bearish momentum as traders await clarity from US economic data releases later in the week. The Bloomberg Dollar Spot Index has also inched higher, adding pressure on gold, which often moves inversely to the strength of the US dollar. Silver, palladium, and platinum have mirrored gold’s downward trend, reflecting broad weakness in precious metals.
With the US economic calendar packed and trade policy in flux, gold’s path in the short term remains uncertain. Investors will be closely watching the PCE data for indications of inflation trends and the Federal Reserve’s next moves. Meanwhile, ongoing trade disputes and geopolitical factors will likely keep gold in the spotlight as a strategic hedge, despite this week’s price pullback.
