Gold Prices Retreat as Investors Await US Inflation Data

By: Swarnalata

Published on: Jun 02, 2025

Gold prices edged lower on Friday, down 0.7% to $3,320.20 per ounce, with spot gold slipping 0.1% to $3,295.14. The decline put bullion on track for a nearly 2% weekly loss as traders positioned themselves ahead of the US personal consumption expenditures (PCE) price index release. Technical resistance near $3,328 capped upside attempts—gold failed to breach that level in both the US and early Asian sessions—according to Kelvin Wong, senior analyst at Oanda Asia Pacific. Meanwhile, a US federal appeals court’s temporary reinstatement of former President Trump’s tariffs added uncertainty to the market, reinforcing gold’s haven appeal even amid the pullback. 

Investors awaited the PCE inflation report, the Federal Reserve’s preferred gauge of price pressures. Forecasts pointed to a 2.2% year-over-year increase in April’s PCE figure, which could influence the Fed’s policy trajectory and the timing of potential rate cuts. A stronger-than-expected reading might delay any easing, while a cooler print could bolster arguments for looser policy later in the year—an environment that typically favors non-yielding assets like gold. 

Oil prices inched higher on Friday but remained on course for a second straight weekly decline. Brent crude rose 0.1% to $63.46 a barrel, and West Texas Intermediate (WTI) gained 0.2% to $61.06, although both benchmarks were down approximately 1.3% for the week. The slump stemmed largely from expectations that OPEC+ would approve another output increase—411,000 barrels per day for July—when its members met, and from lingering US trade policy uncertainty. With several OPEC+ members beginning to unwind voluntary supply cuts, analysts warned of potential oversupply, especially if global demand growth remains subdued amid tariff-related headwinds.

Despite near-term pressures, longer-term investors may still view commodities as inflation hedges. Goldman Sachs recently recommended overweighting gold and maintaining some oil exposure to shield portfolios against rising price pressures and geopolitical shocks. In its latest note, the bank emphasized that while OPEC+ supply hikes may cap oil’s upside in the coming quarters, diversified exposure to both oil and gold could reduce overall portfolio volatility and provide protection if inflationary risks persist.