Gold Tests Records as Markets Eye PCE Data; USD Index Under Pressure

Gold spot prices in USD terms are approaching record highs as traders position ahead of crucial PCE inflation data and potential Federal Reserve rate signals. The precious metal's strength reflects growing uncertainty about the Fed's policy trajectory, with the US Dollar Index showing vulnerability. EUR/USD is benefiting from dollar weakness, while USD/CAD faces pressure from both greenback softness and commodity currency strength. Market participants are particularly focused on the upcoming PCE data, the Fed's preferred inflation gauge, which could significantly influence rate cut expectations currently priced at 55bps by year-end. Gold's rally suggests investors are hedging against potential policy missteps or seeking safety amid mixed economic signals. The technical picture shows gold testing psychological resistance near all-time highs, with a breakout potentially triggering accelerated gains and further dollar weakness across major pairs.