Gold holds elevated levels as softer inflation meets firm labor data

Gold (XAUUSD) has pulled back slightly while holding near elevated levels, as softer inflation offsets firm labor conditions. Cooling inflation has pushed expectations for policy easing later this year. At the same time, strong employment data has kept near-term rates steady. Thin participation and mixed signals have slowed momentum. As a result, gold has shifted into consolidation while the market waits for clearer direction from upcoming data.

Gold pauses near upper range as inflation cools and labor remains strong

Gold has drifted lower after struggling to extend gains near higher levels. Extended holidays have reduced participation across major regional markets, limiting buying interest. Price action has remained range-bound despite a modest recovery from intraday lows. This keeps gold in consolidation while the market waits for clearer signals from upcoming catalysts.

Market pricing now reflects growing confidence in mid-year easing. CME Group’s FedWatch Tool shows rising odds for a rate cut in June, with additional probability building into July. Attention has turned to upcoming Fed meeting minutes, fourth-quarter GDP, and the core PCE index. These releases should clarify how policymakers assess inflation progress and growth risks.

At the same time, labor conditions remain firm. January Nonfarm Payrolls posted the strongest increase in more than a year, while the unemployment rate edged lower. This strength supports the case for the Fed to remain patient near term. Inflation progress has also been uneven, with core PCE still closer to 3% than the 2% target. This balance has slowed near-term momentum without altering gold’s broader support.

Gold consolidates above rising support after wedge pullback

The chart below shows gold trading within a clear ascending broadening wedge. Price pushed higher into late January before stalling near the upper boundary. A sharp pullback followed, but the decline held above the rising lower trendline. This price action points to expanding volatility within an upward structure, rather than a shift in the broader trend.

After the pullback, gold rebounded from the lower boundary near the $4,600 area. This zone aligns with long-term structural support and has acted as a stabilizing base. The rebound carried price back toward the $5,000 region, where selling pressure has capped advances. Since then, price action has compressed into a narrower range.

Recent price action suggests gold is stabilizing within its broader structure. Higher lows continue to develop along a rising internal trendline, while repeated setbacks near $5,050 highlight overhead resistance. This setup signals consolidation within the broader wedge. As long as gold holds above the rising base, the structure remains intact.

Gold outlook: Support holds as markets await clearer policy signals

Gold remains in consolidation as cooling inflation supports the broader outlook while firm labor data slows near-term momentum. Price continues to hold above key structural support, keeping the longer-term setup favorable despite limited follow-through. This balance favors consolidation rather than reversal. Clearer direction is likely to emerge as upcoming economic data and policy signals reshape expectations.