Investors are focused on a series of important US economic data releases scheduled for Thursday, as gold continues to trade under strong pressure after breaking below $4,000 an ounce for the first time since November 2025, amid rising bets on continued tightening of US monetary policy.
The data to be released includes the final reading of US GDP for the first quarter, which forecasts an annualized growth of 0.5%, along with weekly unemployment claims data expected to rise slightly to 226,000 claims compared to 225,000 in the previous reading.
Investors are also awaiting the release of the core personal consumption expenditures price index for May, the Federal Reserve's preferred measure of inflation, amid expectations that it will slow to 3.8% year-on-year compared to 4.1% in the previous reading.
This data is of exceptional importance, as it is expected to reshape market expectations regarding the path of US interest rates for the remainder of the year, which is the most influential factor in gold movements during the current period.
The dollar and interest rates continue to put pressure on gold.
Gold is trading today in an environment dominated by the strength of the US dollar, which is holding near its highest levels in 13 months, supported by growing investor confidence that the Federal Reserve may continue to tighten monetary policy to counter inflationary pressures.
By 10:40 AM Riyadh time, spot gold had fallen 0.5% to $3,980.88 per ounce, while US gold futures for August delivery had declined 0.3% to $3,996.50.
The precious metal had lost the $4,000 level during Wednesday's session for the first time in more than 7 months, falling by about 29% compared to its all-time high of $5,594.82 per ounce on January 29.
Matt Simpson, senior analyst at StoneX, said that gold is currently moving within a clear downward trend in light of the current environment characterized by a strong US dollar and continued pressure on the precious metal.
Why will today's data be crucial?
GDP data is an important indicator of the strength of the US economy, as any reading higher than expected will reinforce the belief that the economy can still withstand high interest rates, which supports the dollar and puts pressure on gold.
In contrast, unemployment benefit claims data provides a direct picture of labor market conditions, as a continued decline in claims indicates a strong labor market, giving the Federal Reserve more room to maintain its tight monetary policy.
But the most significant event remains the release of the core personal consumption expenditures price index, which the Federal Reserve relies on primarily to assess the path of inflation.
If the reading comes in higher than expected, market bets may rise on further interest rate hikes this year, which could continue to put pressure on gold and push it to lower levels.
If inflation data comes in weaker than expected, the dollar could weaken and US bond yields could fall, potentially giving gold a chance to catch its breath after the recent downward trend.
Markets are betting on continued monetary tightening.
Markets are still pricing in three US interest rate hikes this year, with a probability of a rate increase at the September meeting approaching 67%, according to data from the CME Group's Fidwatch tool.
These expectations reduce the appeal of gold, as it is a non-yielding asset, at a time when investors prefer bonds and financial instruments that benefit from higher interest rates.
Analysts also warn that if these expectations persist, it could lead to a new wave of withdrawals from gold-backed exchange-traded funds, which could increase selling pressure on the yellow metal.
Meanwhile, investors continue to monitor geopolitical developments in the Middle East, but their impact on gold has diminished in recent days as expectations of US monetary policy dominate market movements.
The artistic image still strongly tends towards decline
From a technical perspective, reading the daily gold chart via the WarrenAI platform from InvestingPro indicates that the downward trend is still dominant, after breaking the pivotal support level near $4200 and completing a 100% bearish pattern.
The price is moving below the Ichimoku cloud and the Tenkan and Kedgon lines, indicating that the current decline has strong and orderly momentum, and is not just a temporary corrective move.
The Supertrend indicator continues to issue a sell signal at $4345, while the ADX indicator is recording around 37.6 points with a clear advantage for the negative indicator, which reflects the strength of the downward trend.
The price's departure of approximately 7.4% from the 20-day moving average increases the likelihood of a continued decline, but at the same time it raises the chances of a short corrective bounce as a result of the widening gap from the averages.
Is gold nearing a technical rebound?
Despite the dominance of the downtrend, some technical indicators have begun to show signs of oversold conditions, which may pave the way for a limited rebound.
The Relative Strength Index (RSI) has fallen to around 25.7 points, a level that often precedes short corrective bounces.
The price is also touching the lower limit of the Bollinger Band indicator between $3952 and $3988, while the 20-day moving average is near $4305, which strengthens the likelihood of the price temporarily returning towards the average.
In addition, a Spinning Top candlestick pattern formed near the $3988 level, reflecting a state of hesitation between buyers and sellers, but it needs confirmation through the appearance of a bullish reversal candlestick to gain greater credibility.
However, analysts believe that any rebound during the current phase will remain within the framework of correction as long as gold remains below the resistance zone extending between $4170 and $4220.
Key levels to monitor
WarrenAI's analysis suggests that breaking the $3,960 level and closing below it daily would reinforce the likelihood of a continued decline towards the first major support zone at $3,800, followed by the $3,720 level, which represents an important historical support and a previous low recorded in October 2025.
In the event of a rebound, the first significant resistance zone lies between $4170 and $4220, an area expected to attract a new wave of selling, given its alignment with broken support and strong technical levels.
Conversely, the area between $3720 and $3800 remains the most likely to see short-term buyers emerge, but it remains suitable only for quick bounce deals, as long as the overall picture of the downward trend does not change.
Thus, gold enters today's session at one of its most sensitive stages in recent months, as the anticipated US economic data may determine whether the precious metal will continue its losses towards new lows, or whether it will get a chance to catch its breath through a temporary technical rebound before resuming the main downward trend.
