Gold Holds Near $4,650 as Traders Eye US PCE for Fed Rate Clues

Spot gold continued its two-way fluctuation during Asian hours on Wednesday, last trading at $4,641.17, after briefly trading above $4,650 earlier, remaining near its highest level since May 14. Traders stayed on the sidelines ahead of key data and official speeches, with gold lacking momentum for a unilateral breakout.

**PCE Data as Near-Term Catalyst**

Market focus is locked on the US Personal Consumption Expenditures (PCE) price index due Wednesday. The data is one of the Fed's core inflation gauges; a higher-than-expected reading could reinforce the case for keeping rates elevated, pressuring gold, while a softer print could push prices higher. According to the CME FedWatch tool, as of the latest data, traders price in roughly a 64% probability of the Fed holding rates steady in September and about a 36% chance of a hike. ActivTrades senior analyst Ricardo Evangelista said whether gold can hold above $4,600 and extend gains largely depends on whether the dollar remains under pressure and whether US Treasury yields can stabilize at current levels or decline further.

**Warsh Speech and Fiscal Concerns Converge**

Fed Chair Kevin Warsh's keynote speech at the Jackson Hole global central bank symposium on Friday is viewed by investors as another key juncture for clues on the rate path. Meanwhile, concerns over the US fiscal outlook continue to build. ING strategists noted that the Treasury's expanded bond buyback program has rekindled market attention on the US's massive financing needs and fiscal creditworthiness, reinforcing gold's appeal as a store of value. Saxo Bank analysts also noted that the Treasury's unexpectedly aggressive long-dated bond buybacks have weighed on the dollar, making dollar-denominated gold more attractive to overseas investors.

**Technical Support Leans Bullish**

On the technical front, gold's recent breakout above the confluence resistance near the $4,500 psychological level—a zone formed by the 200-day simple moving average and the 38.2% Fibonacci retracement of the March-to-June decline—provides support for bulls. The Relative Strength Index (RSI) hovering near 71 in overbought territory suggests near-term momentum remains positive, but conditions are stretched, and any corrective pullback is more likely to attract buying, with limited downside scope.