Gold is climbing back toward key resistance after fresh U.S. data showed inflation and growth both cooling faster than expected, easing pressure on the Federal Reserve to keep policy tight. The metal has reclaimed its 20-day moving average, with the next upside target at 4,185 lining up with the 50-day average on both the daily and 4-hour charts.
Gold is pushing higher as a run of softer U.S. economic data reduces the case for the Federal Reserve to hold a restrictive stance. On the daily chart, XAU/USD closed above its 20-day Simple Moving Average, a signal that short-term bullish momentum is building.
Inflation and growth both come in soft
The Core PCE Price Index, the Fed's preferred inflation gauge, rose 0.1% month-over-month, below the 0.2% expected, while the annual rate held at 3.3%, slightly lower than the prior month. That points to underlying price pressures continuing to moderate.
Growth told a similar story. Q2 GDP expanded just 1.5%, well below the 2.1% consensus forecast, signaling that economic activity is losing momentum. Jobless claims, however, stayed relatively resilient: initial claims came in at 197K, under the 201K expected. That labor strength wasn't enough to offset the broader dovish tone from the inflation and growth prints.
Together, the data likely reinforces expectations that the Fed may turn less aggressive in the months ahead, a backdrop that tends to weigh on the dollar and Treasury yields while supporting non-yielding assets such as gold.
Dollar under pressure, gold eyes $4,185
The Dollar Index pulled back and now trades below its 50-day Simple Moving Average, though the broader higher-high, higher-low structure remains intact. The next area of interest sits in the 0.50-0.618 Fibonacci retracement zone, which aligns with the 200-day average and a potential upside target near 101.980 if the correction fades.
For gold, the next upside objective is the 4,185 resistance zone, which coincides with the 50-day Simple Moving Average. On the 4-hour chart, the broader structure remains bearish, but price is consolidating within a defined range while holding above both the 20-period and 50-period moving averages. A breakout above 4,185 would strengthen the recovery case; rejection there would extend the consolidation instead.
Source: Commodities Analysis & Opinion
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