Introduction
Gold prices are on course to record another week of volatile sessions as traders continue to argue who actually control the momentum. This week, the price action was once again mainly driven by headlines and macroeconomic data. Today’s economic numbers once again brought more questions rather than answers for traders while speculators continue to battle with the assumptions of how important these numbers were and how the Fed is going to interpret them. Here is more on this
Key Considerations Affecting Gold Prices
1. Federal Reserve Expectations and the Economic Outlook
The recent gold price moves are largely led by speculations regarding the Federal Reserve’s future policy decisions. The Core PCE Price Index, reported at 0.2% today, is the inflation measure favored by the Federal Reserve, and it is largely stable, adding to speculations of potential rate cut decisions by the Federal Reserve in December 2025.
With the 87% likelihood of a rate cut already factored into prices, it is likely that gold prices will benefit due to declines in real bond yields, which will increase gold’s attractiveness vis-à-vis other investments.
2. Geopolitical Risks and Gold’s Safe-Haven Demand
Uncertainties associated with geopolitics also continue to influence gold prices. Although information on the economy has the potential to indicate growth and inflation, geopolitical risks, which include increasing tensions between countries in the Middle East, increasing tensions between the US and Chinese governments, and President Trump’s controversial moves, are also increasing instabilities associated with the global economy.
President Trump’s moves associated with his foreign policy agenda, which involves military interventions and trade wars, are also increasing apprehensions, and, consequently, investors are turning to safe havens such as gold. Not only are geopolitical risks increasing instabilities associated with financial markets, but they also include a risk premium associated with gold, which historically has a link with geopolitical risks.
3. Economic Data and Its Impact on Gold Sentiment
The data which came today, the Core PCE Price Index and the Preliminary UoM Inflation Expectations, is adding to the complexity of the economy. The Core PCE Price Index came at 0.2%, which is what is expected, but it reiterates the fact that inflation is a concern, albeit under control.
The fact that the Preliminary UoM Consumer Sentiment has reached 53.3 is certainly a sign of strengthening consumer confidence, but the fact that the Preliminary UoM Inflation Expectations are at 4.1%, which is above the target levels set by the Fed, suggests otherwise.
All of these indicators are leading to a very delicate balance between gold and the various indicators. Mostly things are more complex and both bulls and bears have arguments for their side to drive the price action. But the fact is that there is no clarity and the argument can actually swing both way, this is keeping the price of the shining metal very much in check.
Technical Analysis and Future Outlook
On the technical side, we are looking at the price of the shining metal well off the lows of the week and it has crossed above the high of the previous week. This means that most the momentum was very driven by the bulls as bears did not become successful in driving the price close enough to the lows of the previous week.
The RSI and MACD on the weekly time frame are both near the levels which would say that going long may not make much sense as the risk is high and caution should be exercised.
The chart below shows important price levels for the shinning metal.
Gold price chart by Exness
Conclusion
Gold’s performance during the current week has been affected by various factors, including the expectation of Fed policy and geopolitical events. The fact that the rate of inflation has been stable, along with the expectation of a Fed rate cut, has been positively impacting the gold prices, and gold has managed to continue getting support from not only safe-haven demand but also easing monetary policies. Although the overall economic indicators published during the current week, including the Core PCE Price Index and Consumer Sentiment, have been to some extent mixed, the overall trend of gold prices is actually bullish. Given the fact that geopolitical disruptions and the possibility of a dovish Fed policy are on the cards, it is expected that gold prices will continue to move north.