Core PCE Released, Gold Holds in the $4,800s
Gold prices (XAU/USD) faltered after profit-taking from record highs, but rebounded to around $4,850 per ounce following the release of US economic data on Thursday (January 22nd). Gold's movement tended to "hold its breath" as the market assessed that the latest inflation data wasn't hot enough to force the Fed to act aggressively, but also not cold enough to cause the dollar to collapse.
Core PCE data—the Fed's favorite inflation indicator—was recorded at 0.2% (m/m), in line with expectations. This "just right" figure caused the market to return to wait-and-see mode: the dollar gained some strength, while gold lacked a compelling reason to continue its recent rally.
Previously, gold had corrected from a peak above $4,888 after tensions over Greenland eased—Trump withdrew his tariff threat and rejected the option of using force. As geopolitical risks receded, safe-haven demand diminished, so gold's upside was temporarily limited.
But gold hasn't lost its cushion. The issue of the Fed's independence remains a source of uncertainty, especially after the spotlight was on the attempted dismissal of Fed officials, which is considered to undermine the central bank's credibility. This is what keeps buyers willing to take a stand every time the price drops.
In conclusion: after today's data, gold appears to be consolidating—not reversing. As long as prices remain in the $4,800s, the market will tend to view dips as buying opportunities, while awaiting the next catalyst from further data, the direction of the dollar, and geopolitical headlines.
Source: Newsmaker.id
