Profit-Taking Sets in but Macro Backdrop Stays Supportive
Wednesday’s pullback was inevitable after extreme gains. Trump’s softer tone on Powell and openness to tariff reductions sparked temporary risk-on sentiment. Gold retreated as equities bounced and the dollar recovered. By Thursday, opportunistic buyers returned, stabilizing gold prices heading into the weekend.
Despite volatility, gold’s core fundamentals remain solid. The IMF warned about U.S. growth risks tied to tariffs, while the Fed held rates steady, citing economic uncertainty. Institutional demand stays strong, and low real rates continue providing underlying support.
Key Economic Data Could Dictate Gold’s Next Move
The upcoming week brings critical data. Core PCE inflation is forecast to show persistent pressures, and Q1 GDP growth is expected at a modest 0.4%. If inflation beats estimates or growth disappoints, gold could regain upside momentum.
Non-farm payrolls are expected to add just 129,000 jobs—down sharply from prior months. A weaker jobs report would boost recession fears and safe-haven buying. Traders will also monitor ISM manufacturing PMI (expected at 48.0, signaling contraction) and consumer confidence (forecast at 87.4), both key sentiment indicators.
Gold Prices Projection: Consolidation Before Potential Breakout
Gold is likely to consolidate further as traders digest political and economic signals. However, the structural bullish case remains intact, supported by persistent inflation concerns, Fed uncertainty, and ongoing dollar weakness. The pullback presents a strategic opportunity for buyers, with the longer-term gold prices forecast remaining decidedly bullish.
More Information in our Economic Calendar.
