Gold prices edged lower in early Thursday trading but remain close to the $4,200 level. A combination of supportive factors — including dollar softness following disappointing US employment data, dovish remarks from senior Fed officials, and ongoing geopolitical tensions — has helped underpin the precious metal. However, many gold bulls are choosing to stay on the sidelines ahead of tomorrow’s PCE inflation figures. At the same time, an increase in risk appetite across equity markets is limiting the metal’s upside. Against this backdrop, traders will be closely monitoring today’s US initial jobless claims and tomorrow’s PCE data, the Fed’s preferred inflation gauge. Should the data confirm expectations of a cooling labour market and stabilising inflation, market bets on Fed rate cuts could increase, adding pressure on the dollar and creating fresh scope for gold price gains.

 Ricardo Evangelista, ActivTrades