Gold (XAU/USD) trades modestly lower near $4,600 per troy ounce on Thursday, retreating from a fresh all-time high of $4,643 set in the previous session. The non-yielding metal faces pressure after stronger-than-expected US Producer Price Index (PPI) and Retail Sales data, combined with last week’s softer Unemployment Rate, strengthened expectations that the Federal Reserve will keep interest rates unchanged in the coming months.
Safe-haven demand for Gold has also eased amid signs of reduced geopolitical stress. US President Donald Trump said reports suggested that Iran’s crackdown-related killings were slowing and that no large-scale executions were planned, though he cautioned that potential US military action could not be ruled out. Washington, he added, would continue monitoring developments, according to Reuters.
However, demand for precious metals could regain momentum amid renewed concerns over the Federal Reserve’s independence. Fed Chair Jerome Powell criticized the Trump administration’s decision to subpoena him, calling it an attempt to pressure the central bank into adopting looser monetary policy. While Trump stated on Wednesday that he has no plans to dismiss Powell despite the Justice Department’s criminal investigation into the Fed chair, he added that it was “too early” to determine what actions might follow.
Daily Digest: Gold pressured as US Dollar strengthens
The US Dollar Index (DXY), which tracks the Greenback against six major currencies, extends gains after modest losses in the previous session. At the time of writing, the index trades near 99.10, reducing foreign-currency demand for dollar-denominated Gold.
On Wednesday, the US Census Bureau reported that Retail Sales increased by 0.6% in November to $735.9 billion, rebounding from a 0.1% decline in October and beating expectations of a 0.4% rise. Meanwhile, November’s PPI surprised to the upside, with both headline and core readings accelerating to 3% year-over-year.
Following Friday’s US jobs report, analysts at Morgan Stanley pushed back their expectations for Fed rate cuts to June and September, from earlier projections of January and April.
Minneapolis Fed President Neel Kashkari said the US economy appears resilient and that tariff-related price pressures have been less pronounced than expected. He added that inflation remains elevated but continues to move in the right direction. Supporting this view, the Fed’s Beige Book noted that economic activity picked up at a “slight to modest” pace across most regions since mid-November, marking an improvement over recent reports.
Inflation data also showed signs of cooling. US core CPI rose 0.2% month-over-month in December, below expectations, while annual core inflation held steady at 2.6%, matching a four-year low. Headline CPI increased 0.3% on the month, in line with forecasts, leaving annual inflation unchanged at 2.7%.
Geopolitical risks remain in focus. The US-based HRANA rights group reported that the death toll from Iran’s protests has climbed to 2,571. Trump has urged Iranians to continue protesting and warned of additional pressure on Tehran, including a proposed 25% tariff on countries conducting business with Iran. He also cautioned that action could be taken before any potential negotiations.
US labor market data showed Nonfarm Payrolls rose by 50,000 in December, missing expectations of 60,000. However, the Unemployment Rate edged down to 4.4% from 4.6%, while Average Hourly Earnings increased to 3.8% year-over-year, up from 3.6%.
Technical outlook: Gold bulls remain in control above key EMAs
Gold trades near $4,600 on Thursday, with daily chart analysis showing prices moving within a developing ascending wedge pattern. While the formation suggests slowing upside momentum and the risk of a bearish reversal if the lower trendline breaks, the broader trend remains constructive.
The metal continues to hold above the rising nine-day Exponential Moving Average (EMA), supporting the short-term uptrend, while the 50-day EMA slopes higher, reinforcing the broader bullish bias. The 14-day Relative Strength Index (RSI) stands at 66.05, indicating positive momentum without entering overbought territory.
Immediate resistance is seen at the record high of $4,643, followed by the upper boundary of the ascending wedge near $4,660. A sustained break above this zone could open the door toward the $4,700 level. On the downside, initial support rests at the nine-day EMA around $4,535.64, with further support near the lower wedge boundary close to $4,490.00.
