Gold prices opened Tuesday’s trading with losses of 1.5%, heading towards a second consecutive session of declines.
Gold is currently trading near the first weekly support level at $4907. It should be noted that breaking this level could put pressure on the yellow metal to resume its downward trend, which could extend towards the second weekly support level of $4772.
If gold breaks through the bearish trend line, then the weekly pivot point at $5013, it is likely to regain the resistance levels of $5148 then $5254.
On the economic data front, investors will focus on key reports as they seek to get clues about the timing of the next move by the Federal Reserve.
Perhaps the most important report will be the core personal consumption expenditure index, a measure of inflation closely monitored by the Federal Reserve.
Core PCE is expected to rise 0.3% month-on-month in December, compared to 0.2% increase in November. The year-on-year reading is expected to accelerate to 3% from 2.8% previously.
GDP data will also be of paramount importance, with preliminary forecasts pointing to a slowdown in the U.S. economy during the October-December period.
Economists expect the U.S. economy to grow by 2.8% in the last three months of 2025, compared to 4.4% in the third quarter.
On the other hand, minutes from the last policy meeting, set to be unveiled on Wednesday, could provide more insight into the path ahead for the Fed’s monetary policy.
Notably, two Fed governors, Stephen Miran and Christopher Waller, dissented from the Fed’s decision to hold rates and push pause of a series of borrowing cost cuts dating back to the middle of last year.
Fed Chair Jerome Powell, at the same time, is edging closer to end of his tenure at the helm of the central bank. Trump has nominated former Fed Governor Kevin Warsh to replace Powell, whose term ends in May, and investors have been attempting to discover Warsh approach to rates could differ from his predecessor.
Finally, markets will pay close attention to the U.S. service and manufacturing PMI reports for February. If these indicators rise above expectations, it could negatively affect gold prices, while the opposite is true.