Gold Price Forecast: XAU/USD eyes US PCE inflation data for next move
- Gold consolidates rebound from eight-week lows, while trading below $4,200 early Wednesday.
- US Dollar sees a profit-taking pullback ahead of US ADP jobs and PCE Inflation data.
- Gold reverts to the key support-turned-resistance near $4,185, with daily RSI still bearish.
Gold is consolidating the previous rebound from an eight-week low of $4,110 in Asia on Wednesday, although it remains below $4,200 ahead of the US ADP jobs report and core Personal Consumption Expenditures (PCE) Price Index data.
Gold looks to US data for the next big move
Gold is struggling to capitalize on Tuesday’s late rebound, with Oil prices seeing a renewed uptick after Axios reports that Qatar-mediated diplomatic talks between the United States (US) and Iran yielded little progress. In fact, the impasse sparks fear of a fresh outbreak of military conflict between the two warring nations.
These renewed geopolitical concerns and rebounding oil price-driven inflation worries are limiting further upside in Gold.
Additionally, traders refrain from placing fresh bets on the bullion, in anticipation of the critical US core PCE Price Index data, the Federal Reserve’s (Fed) preferred inflation measure, which could shed fresh light on the central bank’s interest rate outlook.
Markets are now pricing in a 47% chance of a Fed rate hike in October, according to CME Group’s FedWatch Tool, down sharply from just over 70% seen a day ago.
October Fed rate-hike expectations declined after New York Fed President John Williams said that Fed policymakers may only need to deliver one more hike this year to get inflation back on track to the central bank's 2% target.
Williams’ less urgency for rate hikes weighed heavily on US Treasury bond yields across the curve, fuelling a correction in the US Dollar (USD) and the rebound in Gold price.
Williams tempers post-hike urgency
Fed’s Williams delivered a moderately hawkish message, with a FXS Speechtracker score of 6.4 slightly above the 6.2 historical average, signaling continuity rather than a tonal shift. The emphasis on “no need for urgency” after the September rate hike, combined with guidance that one further hike is likely if the economy meets expectations, underscores a data-dependent stance that still prioritizes getting inflation back to 2% and preventing it from becoming entrenched.
The FXS Fed Sentiment Index fell by 1.43 points to 144.29, indicating a modest pullback in perceived hawkishness even as the index remains well above the neutral 100 mark.
Gold’s swift recovery was also helped by a sharp sell-off in Oil prices amid renewed hopes of diplomacy as the US-Iran talks were set to resume, with Qatar as a mediator.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,175.27, extending its retreat below all the major simple moving averages and keeping a bearish near-term bias in place. The 21-day SMA at $4,320.18, the 50-day SMA at $4,322.71, the 100-day SMA at $4,287.98 and the 200-day SMA at $4,538.15 all sit overhead as dynamic resistance, reinforcing the idea of a market now capped by previously supportive levels. The Relative Strength Index (14) at 39.78 hovers just below neutral territory, hinting at persistent but not extreme bearish momentum after the recent slide.
On the topside, immediate resistance aligns with the descending trend line coming in near $4,312.54, ahead of a dense cluster formed by the short- and medium-term SMAs around $4,320–$4,323, with the 100-day SMA at $4,287.98 and the longer-term 200-day SMA at $4,538.15 marking higher barriers if a deeper rebound unfolds. On the downside, the key structural support remains the rising trend line drawn from the $3,999.15 area, which would be the next bearish objective on a continuation lower and whose loss would likely open the door to a broader corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
Core Personal Consumption Expenditures - Price Index (YoY)
The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures." Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Next release: Wed Sep 30, 2026 12:30
Frequency: Monthly
Consensus: 3.3%
Previous: 3.3%
Source: US Bureau of Economic Analysis
After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed’s forward guidance and vice versa.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
