Gold (XAU/USD) Slips Below $4,350 Ahead of CPI as Bulls Defend $4,280
Gold prices eased modestly in early European trading on Thursday, slipping below $4,350 as investors positioned cautiously...
Quick overview
- Gold prices dipped below $4,350 as investors await the US Consumer Price Index report, reflecting cautious positioning rather than a shift in sentiment.
- Despite the pullback, expectations for further Federal Reserve rate cuts support gold's appeal as a non-yielding asset.
- The US dollar's recent stabilization has weighed on gold prices, but lower real yields and soft growth expectations limit downside risks.
- Technical indicators suggest that gold remains in a bullish trend, with key support levels holding and potential for further gains if prices break above $4,385.
Gold prices eased modestly in early European trading on Thursday, slipping below $4,350 as investors positioned cautiously ahead of the US Consumer Price Index, the most important macro release of the session. The pullback reflected short-term profit-taking and a mild rebound in the US dollar rather than a shift in underlying sentiment.
Despite the softer tone, downside pressure remains contained. Recent US economic data continues to strengthen expectations that the Federal Reserve may move toward further rate cuts, a backdrop that typically favors non-yielding assets such as gold. With inflation trends now under scrutiny, today’s CPI report is likely to determine whether bullion resumes its upward path or extends consolidation.
Dollar Rebound Meets Rate-Cut Reality
The US dollar attempted to stabilize after recent losses, briefly weighing on gold prices. However, momentum behind the greenback remains fragile as labor market signals point to cooling economic conditions.
According to the US Bureau of Labor Statistics, Nonfarm Payrolls rose by just 64,000 in November, following a sharp downward revision in October. The unemployment rate climbed to 4.6%, its highest level in more than a year. LSEG data shows futures markets now pricing roughly a 31% probability of a rate cut next month, up from 22% before the jobs report.
Lower real yields and softer growth expectations continue to cap dollar strength, limiting downside risks for gold even during corrective phases.
Fed Signals Stay Mixed, Keeping Gold Bid
Federal Reserve messaging remains divided. Governor Christopher Waller has acknowledged that policy may need to move closer to neutral as inflation cools, while emphasizing patience. In contrast, Atlanta Fed President Raphael Bostic has argued against near-term cuts unless inflation shows clearer progress.
This divergence leaves markets highly sensitive to incoming data, placing added weight on today’s CPI release. Consensus forecasts call for headline CPI at 3.1% year-on-year, with core inflation at 3.0%. Any downside surprise could quickly revive rate-cut bets and reinforce demand for gold.
Gold Technical Outlook: Bulls Hold the Upper Hand
From a technical perspective, gold is trading near $4,333, consolidating within a well-defined ascending channel that has guided price action since mid-November. The broader trend remains bullish, though momentum has cooled near channel resistance.
Price is holding above the 50-EMA at $4,281, with the 100-EMA near $4,236 reinforcing trend support. Recent candlesticks show consolidation rather than distribution, suggesting buyers remain in control on pullbacks.
Key levels to watch:
- Resistance: $4,348–$4,385, then $4,426
- Support: $4,278, followed by $4,236
RSI near 58 reflects steady momentum without overbought conditions. As long as gold holds above $4,280, the bias favors buying dips, with a breakout above $4,385 opening the door to fresh highs.
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