Gold Holds as Markets Digest Strong US Data

Gold remained resilient overnight, hovering at US$3,331 despite stronger-than-expected US economic data and a modest retreat in risk sentiment. The yellow metal briefly paused its recent uptrend but continues to hold well above key technical support, underlining its role as a store of value in an increasingly complex macro environment.

Macro Tailwinds Remain for Gold

The US Dollar Index (DXY) fell to levels not seen since February 2022, and Treasury yields declined again - typically supportive for gold. However, the metal saw limited upside as surprisingly strong US data temporarily shifted attention back to economic strength and delayed interest rate cut expectations.

• Durable Goods Orders surged 16.4% in May, far above the 8.5% forecast, driven by a rebound in aircraft demand.
• Initial Jobless Claims fell to 236,000, pointing to continued labour market tightness.
• Q1 GDP was revised lower to -0.5%, reinforcing the view that underlying growth is slowing, even as headline data masks emerging cracks.

Despite these short-term data surprises, gold's stability above US$3,300 shows growing investor preference for hard assets as economic and geopolitical crosscurrents build.

Policy Risk Rising as Fed Leadership Comes into Play

Markets were also stirred by reports that US President Donald Trump may nominate the next Federal Reserve Chair as early as October, well ahead of Jerome Powell’s term expiry in 2026. Such a move introduces an added layer of uncertainty to the Fed’s already delicate balancing act on rates and inflation.

Fed officials offered little clarity this week:

• Boston Fed’s Susan Collins said the current data doesn't support a rate cut in July.
• Richmond Fed’s Thomas Barkin warned that tariffs may push inflation higher in coming months, although not to previous extremes.

This policy backdrop continues to support strategic gold allocation, particularly for those positioning ahead of potential central bank shifts.

Technical Perspective: Gold Still Constructive

From a technical standpoint, gold (XAU/USD) remains in a broader uptrend, consolidating just above its 50-day moving average (US$3,322). While momentum has softened slightly, price structure remains bullish with higher highs and higher lows.

• Key support: US$3,300, followed by $3,245 (May 29 low), and US$3,200
• Resistance levels: US$3,400, US$3,450, and the record high at US$3,500

This range-bound movement may offer attractive entry points for long-term holders and those looking to increase portfolio resilience in volatile conditions. Gold’s refusal to break lower in the face of strong economic prints, paired with a weak dollar, falling yields, and political uncertainty, reinforces its value as a portfolio stabiliser. While short-term catalysts are mixed, the medium- to long-term setup remains compelling, particularly as markets edge closer to a Fed pivot and the global macro narrative shifts toward slower growth and renewed currency debasement risk.