Gold News: CPI Impact on Fed Policy Could Fuel Next Major Move

Gold Prices Edge Higher as Traders Await Key US Inflation Data

Gold is holding steady on Wednesday, with prices climbing after reclaiming key support levels at $2,895.29 and $2,910.32. A sustained move above $2,910.32 signals strong buying interest, setting up a potential test of the recent high at $2,930.54. If that level breaks, an acceleration toward the record high of $2,956.31 is likely.

On the downside, failure to hold $2,895.29 could push gold into a support zone between $2,854.26 and $2,843.43, where buyers may step in, given the strong technical base provided by the 50-day moving average at $2,816.88.

At 10:27 GMT, XAU/USD is trading $2914.31, down $1.38 or -0.05%.

CPI Report in Focus as Fed Rate Outlook Remains Uncertain

Traders are closely watching the CPI report, due at 12:30 GMT, for clues on inflation and the Federal Reserve’s next move. Markets expect a 0.3% monthly rise in both the headline and core CPI, translating to an annual rate of 2.9% and 3.2%, respectively—both slightly lower than January’s figures.

While inflation has been easing gradually, it remains above the Fed’s 2% target, which could keep policymakers on hold when they meet next week. Fed Chair Jerome Powell has suggested that tariff-driven inflation may be temporary, but concerns linger that President Trump’s recent tariff hikes could add price pressures.

Trump’s Tariff Policies Add to Uncertainty

Trump’s decision to raise tariffs on steel and aluminum imports has injected further volatility into financial markets. Some analysts argue that these trade measures could slow economic growth while keeping inflation elevated, complicating the Fed’s rate-cut timeline.

If inflation remains stubbornly high, the Fed may delay rate cuts, limiting gold’s upside potential. However, a softer CPI print could reinforce expectations for a rate cut in June, providing fresh support for gold.

Market Forecast: Bullish if Inflation Eases, Bearish if Fed Stays on Hold

Gold’s near-term outlook hinges on today’s inflation data. A softer-than-expected CPI report could weaken the US dollar and boost gold prices toward $2,930.54 and potentially higher. If inflation surprises to the upside, however, expectations for a prolonged Fed pause could trigger a pullback toward the $2,854.26–$2,843.43 support zone.

For now, traders should monitor the $2,910.32 level. A sustained move above it keeps gold’s bullish momentum intact, while a break below could signal further downside risk.

More Information in our Economic Calendar.