Gold prices were little changed during Asian trade on Friday, hovering below $3,750 as traders await the release of the United States core personal consumption expenditures (PCE) price index, a key inflation indicator, later in the session.
By 3:10 pm AEST (5:10 am GMT), spot gold was trading down $2.85, or 0.1%, at US$3,746.48 per ounce.
After a brief rebound on Thursday, the precious metal is once again on a corrective path, with the market now focused on the PCE inflation data for fresh direction.
A key factor weighing on gold has been the U.S. dollar’s strength, which continues to hold recent gains as expectations for aggressive rate cuts from the Federal Reserve have cooled.
Stronger-than-expected U.S. economic data released on Thursday has reinforced the view that the economy remains resilient, making it less likely for the Fed to ease rates aggressively in the near term.
U.S. gross domestic product (GDP) for the second quarter was revised up to 3.8%, higher than the initially reported 3.3%, while jobless claims for the week ending September 20 came in at 218,000, below economists’ forecasts of 235,000.
These figures have dampened expectations for more interest rate cuts, supporting the U.S. dollar and putting downward pressure on gold.
In addition to economic data, President Donald Trump’s latest tariff announcements added to market volatility. Trump revealed a new round of tariffs, including up to 100% duties on branded and patented pharmaceutical products, as well as tariffs on various goods such as kitchen cabinets, furniture, and heavy trucks.
As markets digest these tariffs, attention now turns to the core PCE inflation report, which is expected to show a 2.9% annual increase for August, matching the pace from July.
The headline PCE inflation rate is projected to rise slightly to 2.7%, up from 2.6% in July.
