Major Market Movement Ahead as US PCE Inflation Data Looms

During the late Asian trading session on Friday (December 5), the US Dollar Index hovered near 98.90, while spot gold maintained its upward momentum, trading around $4,228 per ounce. Market participants are closely watching the upcoming US PCE inflation data release.

At 23:00 Beijing time, the US Bureau of Economic Analysis will release the September Personal Consumption Expenditures (PCE) Price Index, which is expected to trigger significant volatility in financial markets.

Economists forecast that the US September PCE Price Index will rise 2.8% year-over-year, up from the previous 2.7% increase. The core PCE Price Index, the Federal Reserve's preferred inflation gauge, is expected to grow 2.9% year-over-year, unchanged from August's reading.

According to LSEG data, traders are pricing in nearly a 90% chance of a 25-basis-point Fed rate cut next week.

Analysts note that gold's biggest short-term risk is stronger-than-expected PCE data, which could boost the dollar and temporarily pressure gold prices if inflation surprises to the upside.

In addition to the PCE data, investors will also monitor the preliminary December University of Michigan Consumer Sentiment Index, expected at 52.0, due at 23:00 Beijing time.

Kshitij Consultancy Service provided the following technical analysis outlook:

Gold: Prices remain well above $4,200/oz. As long as this support holds, the overall bullish trend could target $4,400 in coming sessions.

US Dollar Index: After testing 98.765 yesterday, the index has rebounded slightly. The 98-97 target remains valid while trading below 100. Today's PCE data may clarify market direction.

EUR/USD: The pair has dipped slightly but could still target 1.1750-1.1800 if it holds above 1.16.

EUR/JPY: Continues to trade within the 180-182 range.

USD/JPY: Trading lower in the broad 158-154 range. Below 155.50, it may test 154-153 before attempting a rebound.

USD/CNY: Slight rebound observed. Holding above 7.06 support could lead to a medium-term rise toward 7.08-7.10.

AUD/USD: Approaching resistance near 0.6650. While below this level, expect trading within narrow (0.665-0.650) and broad (0.665-0.645) ranges.

GBP/USD: Declining from 1.3385. Short-term support lies at 1.3300-1.3250. As long as this holds, the 1.34-1.35 upside target remains valid.