Gold Completes Bearish Reversal Pattern Amid PCE-Driven Dollar Strength
Gold's recent price action has been marked by a potential bearish reversal signal, as it completed an evening star pattern. However, this development still requires additional confirmation before it can be considered verified. The precious metal also reclaimed its 200-day simple moving average, which could serve as meaningful support and help contain drawdowns.
The catalyst behind today's selloff was the hotter-than-expected July Personal Consumption Expenditures (PCE) report, which reignited concerns about inflation stickiness. The PCE price index rose 0.2% in July, exceeding forecasts of 0.1%, while the annual reading came in at 3.7%. Core PCE increased 0.2% month-over-month and 3.3% year-over-year.
A firmer U.S. dollar acted as a direct headwind for gold, pressing it lower through the session. Despite this, silver held up slightly better on a relative basis, which is a subtle but meaningful observation. Historically, silver has been known to lead price moves in both directions, amplifying gains in rallies and outpacing losses in downturns.