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The price of gold fell below 3,300 USD per troy ounce on Friday, closing the week with a loss of approximately 1%.

Key drivers behind gold’s movement

Investors remain cautious ahead of today’s US PCE inflation report, which could offer fresh clues on potential Federal Reserve rate adjustments.

On Thursday, gold prices gained nearly 1% after an appeals court temporarily upheld tariffs imposed during Donald Trump’s presidency. This followed a ruling by a US trade court a day earlier, which had blocked the tariffs, deeming their implementation unlawful.

San Francisco Fed President Mary Daly reiterated that the Fed could still deliver two rate cuts this year, as projected in March. However, she emphasised that rates must hold steady for now to achieve the 2% inflation target.

Gold faced volatility in May as global risk sentiment improved, reducing demand for safe-haven assets. Hopes of a resolution in US trade disputes spurred investors back into equity markets.

Technical analysis: XAU/USD

H4 Chart:

• The market completed a correction wave to 3,246, followed by an upward impulse to 3,331
• Currently, a downward pullback towards 3,280 is forming, with consolidation around 3,320
• A downside breakout could extend losses to 3,200, while an upside breakout may fuel a rally towards 3,388, exhausting the bullish wave
• A subsequent downtrend towards 3,060 is anticipated
• MACD confirmation: The signal line has exited the histogram zone, indicating a firm upward trend

H1 Chart:

• The upward wave to 3,331 has concluded, with a correction to at least 3,255 expected today
• Thereafter, another upswing towards 3,355 (potentially extending to 3,388) may follow, although this is viewed as a corrective pullback within the broader downtrend
• Once complete, a new decline towards 3,222 (possibly 3,060) is likely
• The stochastic indicator supports this view: The signal line is below 20, rising sharply towards 80

Conclusion

Gold’s near-term direction hinges on breakouts from the current range, with technical indicators suggesting further volatility ahead.

BoE MPC member Alan Taylor reinforced his dovish position in an interview with the Financial Times, highlighting growing downside risks to the UK economy from global developments.

Taylor, who alongside Swati Dhingra voted for a larger 50bps rate cut in May, argued that monetary policy should be on a “lower policy path” given the accumulating headwinds.

He specifically pointed to impact of Trump’s tariffs on imports would “be building up over the rest of this year in terms of trade diversion and drag on growth”.

While UK inflation unexpectedly jumped to 3.5% in April, Taylor downplayed the significance of the rise, attributing it to "one-time tax and administered price changes."

Switzerland’s KOF Economic Barometer edged up to 98.5 in May from 97.1, marking a modest improvement in economic sentiment. While the uptick is a positive signal, the barometer remains below its long-term average, suggesting that the broader outlook for the Swiss economy "remains subdued".

According to the KOF, the manufacturing sector showed notable strength, contributing to the overall improvement. However, indicators tied to foreign demand and private consumption remain under pressure, highlighting the ongoing drag from weak external conditions and cautious domestic spending.

Full Swiss KOF release here.

Throughout May, a turbulent news backdrop — involving both international trade tariffs and armed conflicts — led to the formation of a peak around $3,430 and a low near $3,130 on the XAU/USD chart. As of today, the price per ounce stands around $3,300 — roughly the same level as at the beginning of the month.

This suggests that supply and demand forces are largely balanced, keeping the price contained between these extremes. The XAU/USD chart provides further confirmation, emphasising the significance of the $3,300 level.

Technical Analysis of the XAU/USD Chart

From a bearish perspective: The A→B→C→D→E sequence forms lower highs and lower lows — a clear sign of a downtrend. This trajectory is marked in red, with the upper line acting as resistance.

From a bullish perspective: Since the beginning of 2025, the gold price has been moving in an uptrend,indicated by a blue channel, with its lower boundary serving as key support (highlighted with arrows).

Notably, these support and resistance lines are converging, forming a narrowing triangle — an indication that supply and demand are balancing, finding consensus around the $3,300 level, where the axis of the triangle lies.

Given this, it is reasonable to assume that in June, the gold price on the XAU/USD chart may continue to fluctuate within this triangle — unless an extraordinary event causes a significant shift in the current balance.

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