Gold News: Prices Move Higher Ahead Of CPI Report

Gold Gains Ground As Traders Focus On CPI Data

Gold is moving higher as traders prepare for the release of U.S. CPI data. The report is expected to show that Inflation Rate declined from 2.5% to 2.3%, while Core Inflation Rate remained unchanged at 3.2%.

The CPI report will likely have a material impact on U.S. dollar and Treasury yields dynamics, so it will be a major catalyst for gold markets.

At this point, U.S. dollar settled at multi-week highs as traders focused on the recent changes in Fed policy outlook. As the U.S. economy remains in decent shape, markets do not expect that Fed will continue to cut rates aggressively, which is bullish for the American currency and bearish for gold markets.

Today, traders will also focus on geopolitical developments as Israeli Defense Minister has recently said that the country’s response to Iran’s attack would be “deadly”. As a traditional safe-haven asset, gold benefits from rising geopolitical tensions.

Technical Analysis

Gold found support near the $2600 level and is trying to settle above the $2620 level. RSI is in the moderate territory, so there is plenty of room to gain upside momentum in case CPI data boosts chances for aggressive rate cuts. If gold manages to settle above $2620, it will head towards the $2650 level. A move above $2650 will open the way to the test of the resistance at $2675 – $2685.

On the support side, a move below $2600 will lead to the test of the nearest significant support level at $2580 – $2590. If gold settles below the $2580 level, it will head towards the next support, which is located in the $2520 – $2530 range. It should be noted that gold may gain significant downside momentum in this scenario.

For a look at all of today’s economic events, check out our economic calendar.