Gold gave back all of Tuesday's gains and extended losses into the US close after a softer PCE inflation print was mainly driven by BEA methodology changes. Traders now see the metal stuck in a range, with a prolonged US-Iran stalemate or a strong jobs report posing the next downside risk.
Gold erases its PCE-driven spike
Gold spiked after Tuesday's softer-than-expected US PCE data, then gave back all the gains and extended losses into the US session close. There was no clear catalyst for the reversal, but there was not one for the earlier rally either, because the PCE surprise to the downside stemmed mainly from the Bureau of Economic Analysis's annual methodological update and revisions. The BEA changed how some prices are constructed, and economists had already warned the revisions could materially lower reported core inflation, so the move was not a game changer.
US-Iran talks and Friday's jobs report cap direction
The metal could stay mostly rangebound in the near term, as lower odds of an October rate hike and ongoing US-Iran negotiations may limit further downside. A prolonged stalemate or negative geopolitical headlines, however, could add bearish pressure. Attention also turns to Friday's US non-farm payrolls report: a merely better-than-expected print may not move gold much, but a very strong reading could trigger another hawkish repricing and weigh on the precious metal, while a surprisingly soft one could lift it as traders scale back aggressive rate hike bets.
Key levels on the daily chart
On the daily chart, gold has been pulling back from Monday's lows on renewed optimism around a US-Iran deal. Sellers are eyeing the 3,885 level, where a major upward trendline also sits; a break there could draw buyers back in to position for a rally toward new record highs, while a breakdown would open the door to 3,500.
On the four-hour chart, a downward trendline still defines the bearish structure, with sellers likely to lean on it toward 3,885 and buyers needing a break higher to target 4,500. On the one-hour chart, the price broke below its counter-trendline and bounced from the 4,140 level, which now acts as minor support.
Source: Investinglive RSS Breaking News Feed
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