Gold News: Strong CPI Print Could Weigh on Prices—Here’s What to Watch

Gold Slips as Powell’s Hawkish Stance and Inflation Data Weigh on Sentiment

Gold prices are retreating on Wednesday after posting a potentially bearish closing price reversal top in the previous session. While this chart pattern does not indicate a trend reversal, it suggests a short-term pullback could be underway.

Traders are eyeing downside support levels at $2,857.49 and $2,836.67, with a major pivot at $2,763.34. A break above $2,942.78, however, would invalidate the pattern and signal a continuation of the uptrend.

At 11:03 GMT, XAU/USD is trading $2883.31, down $14.31 or -0.49%.

Fed Chair Powell Signals No Rush to Cut Rates

Gold’s decline comes after Federal Reserve Chair Jerome Powell reiterated that the central bank is in no hurry to cut interest rates, despite acknowledging that policy adjustments would depend on further cooling inflation and labor market conditions. His comments reinforced expectations that rates could remain elevated for longer, pressuring gold, which typically benefits from lower interest rates due to its non-yielding nature.

Investors are closely watching U.S. economic data, particularly the January Consumer Price Index (CPI) report, expected to show a 0.3% monthly increase following December’s 0.4% rise. A higher-than-expected print could further dampen gold’s appeal by reinforcing the Fed’s cautious stance on rate cuts. Thursday’s Producer Price Index (PPI) data and Powell’s testimony before Congress remain additional risk events.

Trade Tensions and Inflation Risks Keep Gold in Focus

Gold remains supported by broader uncertainty, including geopolitical risks and global trade tensions. After imposing fresh tariffs on steel and aluminum, U.S. officials are finalizing plans for reciprocal tariffs, raising fears of a trade war. Rising import costs could contribute to inflationary pressures, complicating the Fed’s policy outlook.

Meanwhile, energy prices have been climbing, pushing 2-year inflation swaps to near 2.8%, the highest in nearly two years. This suggests markets are bracing for persistent inflation, which could keep real yields elevated and challenge gold’s upside momentum.

Treasury Yields Hold Above 4.5% Ahead of CPI Report

U.S. Treasury yields are consolidating at their highest levels in nine days, reflecting market caution ahead of inflation data. The benchmark 10-year yield has pushed above 4.5%, as traders scale back expectations for a Fed rate cut before September. A stronger-than-expected CPI reading could push yields even higher, further weighing on gold prices in the short term.

Gold Prices Forecast: Short-Term Pullback Before Potential Rebound

Gold’s near-term outlook remains vulnerable to profit-taking and technical selling, especially if inflation data reinforces the Fed’s cautious stance. A deeper pullback toward $2,857.49 or even $2,836.67 is possible before buyers step back in.

However, broader market uncertainty, including trade tensions and inflation risks, could limit downside pressure and keep gold resilient. A move above $2,942.78 would invalidate the current correction and signal renewed bullish momentum.

Traders should closely monitor U.S. data releases and Powell’s remarks for further directional cues.

More Information in our Economic Calendar.