XAU/USD recovers from early losses near $3,982 as softer USD and Fed rate-hike doubts provide support amid persistent inflation concerns.
Gold prices climbed to the upper end of their daily range in European trading Friday, recovering from an intraday dip near $3,982-$3,983. The rebound follows a pullback in the US Dollar, which remains below its May 2025 peak amid shifting expectations for Federal Reserve policy.
The US Personal Consumption Expenditures Price Index rose to 4.1% year-over-year in May, up from 3.8%, while core PCE increased 3.4%. Despite signs of cooling crude oil prices, inflation data reinforced bets that the Fed may still raise rates, with markets pricing an 80% chance of at least one hike by year-end.
Comments from Chicago Fed President Austan Goolsbee and New York Fed President John Williams underscored persistent inflation pressures, limiting gold’s upside. The metal’s recovery remains fragile as traders weigh mixed signals on monetary policy.