Gold prices extended their gains as traders still expect three interest rate cuts this year although they continue to monitor economic data releases.
Meanwhile, increasing geopolitical risks concerning conflicts in Ukraine and the Middle East could continue to support gold in addition to strong central bank purchases.
Throughout March, gold prices have recorded a strong performance and could continue to do so, after surpassing their previous high and the 2200 dollar resistance level, and could be heading toward the 2285 dollar mark although correction risks remain after today’s volatility.
In this regard, attention now focuses on the forthcoming U.S. core personal consumption expenditure (PCE) price index report, expected to shed light on potential Fed actions. A stronger-than-expected PCE reading could affect monetary policy expectations, supporting fewer rate cuts which could dampen gold’s surge over the short term and eventually precipitate some price corrections.
Today’s US GDP and job market data also introduced some volatility in particular as economic growth figures were revised higher, weighing on gold prices to a certain extent.
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