Gold prices soared past $3,370 after Federal Reserve Chair Jerome Powell struck a dovish tone, emphasizing growing risks in the labor market even as inflation pressures remain elevated. Traders now see a 90% probability of a 25 basis-point rate cut, reflecting shifting expectations ahead of key U.S. economic releases. With Durable Goods, GDP figures, and the Fed’s preferred inflation gauge—the Core PCE Price Index—due next week, markets are bracing for data that could further shape the path of monetary policy and precious metals.
Gold extended its upward momentum on Friday, climbing as investors digested Federal Reserve Chair Jerome Powell’s dovish remarks. Powell warned that “downside risks to the labor market are rising,” reinforcing expectations of policy easing even as inflation pressures remain unresolved. Spot gold (XAU/USD) hovered near $3,371 after dipping to an intraday low of $3,321.
Market participants now place a 90% probability on a 25 basis-point rate cut at the Fed’s next meeting, though the final decision will hinge on upcoming data, including two critical inflation prints and the closely watched Nonfarm Payrolls report due September 5. Powell noted that tariffs could trigger a “one-time” price increase but emphasized the Fed’s dual challenge—managing persistent inflation risks while protecting a cooling labor market.
The remarks initially propelled bullion toward $3,350 before extending to a session peak of $3,378, with prices later consolidating just below those highs. Adding to the dovish undertone, Cleveland Fed President Beth Hammack stressed the importance of restoring inflation to target but also acknowledged Powell’s “open-minded” stance on policy.
Looking ahead, traders will closely monitor next week’s U.S. economic calendar, which includes Durable Goods Orders, CB Consumer Confidence, GDP data, Initial Jobless Claims, and the Fed’s preferred inflation metric—the Core PCE Price Index. These releases are likely to provide clearer signals on whether the Fed will deliver the anticipated rate cut and how gold might respond.
Technical Outlook on the Gold (XAU/USD) Market
From a technical and indicator-based perspective, gold has been consolidating around the $3,345 level since its sharp upward move in April. On Friday, price action initially remained cautious, hovering near the key 20-day moving average at $3,345. However, bullish momentum later took hold, driving prices higher and capping the session at $3,377.
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