Gold (XAU) Daily Forecast: Will Bullish Momentum Hold Above $2,520 Amid CPI Report?

Market Overview

Gold prices (XAU/USD) held steady around the $2,520 mark on Wednesday, marking a three-day rally. Investors remain cautious as they await the release of the US Consumer Price Index (CPI) later in the day, which could have significant implications for Federal Reserve policy.

The possibility of a Fed rate cut, paired with a weaker US dollar, is bolstering the yellow metal’s appeal. Broader market uncertainty is also driving safe-haven flows into gold, further supporting its upward momentum.

US Inflation Data to Shape Fed Rate Decision

The US dollar has been under pressure, with traders increasingly betting on a potential rate cut from the Federal Reserve. Recent data has shown signs of cooling inflation, raising expectations that the Fed may take a more dovish stance at its upcoming meeting.

According to the CME FedWatch Tool, markets are pricing in a 67% chance of a 25-basis-point rate cut at the Fed’s September 17-18 meeting.

Economists expect the headline CPI for August to rise by 0.2%, with the yearly rate projected to slow to 2.6%, the lowest since 2021. The core CPI, which excludes food and energy, is also expected to rise by 0.2%, keeping the year-over-year figure at 3.2%.

These inflation figures will play a key role in determining the Fed’s next move, which could further support gold if rate cuts materialize.

Safe-Haven Demand and Broader Market Uncertainty

Amid economic uncertainty and potential dovish monetary policy, gold remains a top choice for investors seeking a safe haven. The likelihood of further rate cuts enhances gold’s attractiveness as a non-yielding asset.

As inflation cools and the dollar weakens, the metal’s upward trend is likely to continue.

While geopolitical tensions and market volatility could also fuel demand for gold, much of the focus will remain on US inflation data and how it influences the Federal Reserve’s decisions in the coming weeks.

Short-Term Forecast

Gold (XAU/USD) remains bullish at $2,520, supported by technical indicators. With key support at $2,500 and resistance at $2,530, the market awaits US inflation data to guide momentum.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,519.71, up by 0.21%, and showing signs of bullish momentum. The price is hovering above its pivot point at $2,512.17, supported by a “three white soldiers” candlestick pattern, which often signals a strong buying trend. Immediate resistance is at $2,529.43, with further levels to watch at $2,539.43 and $2,548.82.

On the downside, key support lies at $2,500.82, followed by $2,485.44 and $2,417.90.

The 50-day EMA at $2,505.24 and 200-day EMA at $2,472.74 are both below the current price, reinforcing the bullish sentiment. As long as prices stay above $2,512, the trend remains upward, but a break below this level could trigger a swift sell-off.