Gold (XAU) Price Forecast: Will Next Week’s CPI Data Spark a Rally or Derail Momentum?

Gold Prices Gain on Safe-Haven Demand and Weak US Dollar

Gold prices posted a strong weekly gain, closing at $2,909.55, up 1.80% as investors reacted to economic uncertainty, slowing US job growth, and shifting Federal Reserve expectations​.

Technically, the market is still in a strong uptrend but the closing price reversal top, posted the week-ending February 28, has stopped the upside momentum.

A trade through $2956.31 will negate the potentially bearish chart pattern, and signal a resumption of the uptrend. Taking out $2832.72 will confirm the chart pattern. This could trigger a 2 to 3 week correction with $2746.58 the first target.

A weaker US dollar, which fell to a four-month low, made gold more attractive to foreign buyers​. The greenback’s decline was driven by a weaker-than-expected non-farm payrolls (NFP) report and growing speculation about Fed rate cuts​.

China continued its gold-buying spree for a fourth consecutive month in February, signaling ongoing central bank demand for the metal​. Meanwhile, geopolitical risks and trade uncertainty provided further safe-haven support.

US Jobs Data and Fed Signals Shape Gold’s Outlook

The US labor market showed signs of cooling, with February’s NFP data revealing 151,000 jobs added, below the forecasted 160,000​. This report reinforced market expectations that the Fed could begin rate cuts by June, with futures pricing in about 78 basis points of easing this year​.

However, Federal Reserve Chair Jerome Powell struck a cautious tone, stating that the central bank needs “greater clarity” before making any moves on interest rates​. Inflation concerns remain a key issue, with upcoming CPI data expected to provide fresh insight into whether price pressures are cooling​.

Tariff Uncertainty and Economic Sentiment in Focus

Trade tensions continue to be a major factor influencing gold. The US recently imposed fresh 25% tariffs on imports from Mexico and Canada, along with increased duties on Chinese goods​. A temporary exemption on auto tariffs for certain manufacturers has added complexity, leaving markets uncertain about the long-term trade policy outlook​.

Consumer sentiment will be another crucial driver in the coming week. The University of Michigan’s Consumer Sentiment Index is set for release on Friday, following February’s sharp decline due to tariff-related concerns and economic uncertainty​.

Gold Price Forecast: CPI and Fed Expectations to Drive Next Move

Gold’s near-term outlook hinges on upcoming inflation data and Fed policy signals. A softer CPI reading could reinforce expectations for rate cuts, boosting gold prices. Conversely, stronger inflation could push Treasury yields higher, weighing on non-yielding assets like gold​.

Trade tensions and a weaker dollar remain bullish factors, but profit-taking and shifting Fed expectations could lead to volatility. If the NFP disappointment leads to further dollar weakness, gold could extend gains toward its all-time high of $2,956.31. However, if inflation surprises to the upside, gold may face selling pressure as investors reassess the timing of Fed rate cuts.

More Information in our Economic Calendar.