Core PCE Data Unexpectedly Falls, Reigniting Rate Cut Hopes and Supporting Gold and Silver
On August 2, 2026, the international precious metals market, after experiencing sharp volatility last week, received key guidance from US inflation data. The latest data released by the US Commerce Department showed that the US core Personal Consumption Expenditures (PCE) price index annual rate for June came in at 4.1%, not only lower than the expected 4.2% but also hitting a new low in nearly two years. This data quickly ignited strong market expectations that the Federal Reserve's monetary policy is about to pivot.
After the data release, the CME FedWatch Tool showed that market bets on a 25-basis-point rate cut at the September FOMC meeting instantly surged to over 85%. Consequently, US Treasury yields fell significantly, with the 10-year yield breaking below the key psychological level of 4.0%, and the US Dollar Index retreated to around 102.5. For non-yielding, dollar-denominated precious metals, this constituted a double benefit. Spot gold prices surged nearly $15 shortly after the data release, reaching a high of $1,975/oz before entering a period of consolidation at high levels. Spot silver was more active, breaking through the resistance level of $24.8/oz and briefly surging to $25.1/oz, with the gold-silver ratio fluctuating around the 78 mark.
Gold: Digesting Profits at Highs, Fundamental Support Remains Solid
Although rate cut expectations provided solid bottom support for gold prices, the market did not immediately enter a one-sided upward trend. Analysts pointed out that as gold prices approached the key historical resistance zone near $1,980, they faced significant profit-taking pressure. Previously, due to the sudden escalation of geopolitical tensions in the Middle East and continued market speculation about a global central bank gold buying spree, a large number of long positions had accumulated in this area. Some short-term traders opted for a "sell the fact" strategy after the PCE data landed, causing a technical pullback after the price surge.
From a technical chart perspective, the gold price trend currently maintains a good upward channel on the 4-hour chart. Key support below lies in the $1,960 to $1,965 range, which is also the 38.2% Fibonacci retracement level of this rally. As long as gold prices can hold this support zone, the short-term adjustment will be seen as a healthy accumulation phase. The net value performance of the Thailand Gold ETF (SET: GLD) closely followed international gold prices, opening slightly higher in the morning and maintaining strong consolidation, showing that Thai local investors' enthusiasm for gold asset allocation remains undiminished. Although the Bank of Thailand has not made further large-scale gold purchases recently, private demand for gold bars and jewelry remains strong, providing additional regional support for gold prices.
Silver Market Dynamics: Industrial Attributes Provide Extra Momentum
Compared to gold's pure safe-haven attribute, silver has shown greater elasticity in this rally. In addition to benefiting from the financial attribute boost brought by Fed rate cut expectations, silver's industrial demand outlook is becoming a new catalyst. With the acceleration of the global green energy transition, especially the huge demand for silver conductive paste from the photovoltaic industry, the physical supply of silver is continuously tightening. Recently released data shows that inventories at major global silver exchanges have fallen to their lowest levels in nearly two years.
Technically, silver prices have successfully held above the key resistance level of $24.5/oz and are currently testing the previous high near $25.5. The MACD indicator has formed a golden cross above the zero axis, indicating that bullish momentum is rebuilding. If silver can effectively break through $25.5, the next target will be the round number of $26. For Thai investors, trading volume in silver ETFs (such as SLV equivalents) that track silver prices has recently expanded significantly, showing that funds are shifting from pure gold allocation towards silver to seek higher beta returns. Investors should note that while silver has greater upside elasticity, its pullback magnitude is often larger than gold's once risk aversion subsides, making proper position control crucial.
Market Outlook: Focus on Non-Farm Payrolls and Thai Local Premiums
Looking ahead, this week's focus will shift to the upcoming US July non-farm payrolls report. If the employment data shows further signs of weakness, it will strengthen concerns about an economic recession and further pressure the Fed to cut rates earlier, creating a new strong boost for gold and silver prices. Conversely, if the data is unexpectedly strong, it could trigger a sharp short-term correction in gold and silver prices.
For Thai investors, in addition to focusing on international macro data, it is also necessary to pay attention to the Bank of Thailand's monetary policy moves and fluctuations in the Thai Baht exchange rate. The Thai Baht has recently strengthened against the US dollar, which has partially offset the gains of gold priced in Thai Baht. However, overall, against the backdrop of increasing global economic uncertainty and a downward trend in real interest rates, gold and silver remain indispensable safe-haven tools in asset allocation. It is recommended that investors buy on dips when gold prices pull back to near support levels, or diversify risk through regular investment in Thai gold ETFs, avoiding chasing prices blindly.
