Gold Price Forecast: XAU/USD at $2178 Amid CPI-Driven Volatility Expectations

In the latest gold price forecast, the XAU/USD pair shows a minor retreat in the Asian trading session, yet it hovers close to the recent historic high established last week. Market participants are adopting a cautious stance, keenly awaiting the US consumer inflation data which may shape the Federal Reserve’s approach to interest rates.

Gold Price Chart

As the June meeting approaches, there’s a growing consensus for a rate cut, as reflected in the dip in US Treasury bond yields, applying pressure on the USD and potentially buoying gold prices.

Anticipating the Fed’s Interest Rate Decision

Despite a climb in the US unemployment rate hinting at possible policy shifts by the Fed, Chair Jerome Powell’s recent remarks on persistent inflation dampen prospects for an early rate reduction.

A stronger-than-expected CPI could hint at fewer rate cuts, potentially dampening gold’s appeal in the short term. Conversely, a softer CPI reading might strengthen expectations for an earlier rate cut, lifting the XAU/USD.

US CPI Data Set to Stir Volatility

As all eyes turn to the upcoming CPI release, with core CPI month-on-month at 0.3% against the previous 0.4%, and the year-on-year CPI holding steady at 3.1%, these figures will be pivotal in forecasting short-term moves in gold.

A deviation from these numbers could trigger significant trading opportunities for the precious metal, introducing a fresh bout of volatility for investors and traders alike.

Gold Price Forecast: Technical Outlook

Gold’s luster dimmed slightly in today’s session, with the price retreating by 0.20% to $2178. The four-hour chart shows a pivot point at $2183, which gold has just slipped below, potentially signaling further downside risk.

Resistance levels are layered at $2196, $2214, and $2232, marking hurdles for any potential recovery. On the support front, $2155, $2131, and $2110 are the key levels that could arrest any declines.

Gold Price Chart

The Relative Strength Index (RSI) stands at a lofty 82, often considered an overbought territory, which could foretell a forthcoming pullback. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2132 supports a bullish stance over a longer horizon.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments