Gold (XAUUSD) Price Forecast: CPI and Powell Speech Set Stage for Next Major Move

Gold Rises on Fed Caution, Dollar Weakness, and Safe-Haven Flows Ahead of Inflation Data

Gold (XAU/USD) posted a strong gain last week, closing at $3325.39, up 2.61% as traders responded to a mix of Federal Reserve caution, a softer U.S. dollar, and persistent geopolitical and trade-related uncertainties. While the rally faded slightly toward the end of the week, the broader backdrop remains favorable heading into a pivotal stretch of U.S. economic data.

Technically, the main trend is up, according to the weekly swing chart. A trade through $2956.56 will change the trend to down, while a move through $3500.20 signals a resumption of the uptrend.

The nearest support is a pair of 50% levels at $3166.46 and $3018.52. The major support is the 52-week moving average at $2692.05.

There is nothing really exciting about this chart pattern. Investors essentially have two choices, buy strength or buy a dip. If bullish news drives the price action then investors are likely to chase it higher.  Economic data, Fed uncertainty and a potential trade war with China are events that could cap gains and lead to a retreat into a value area like $3166.46 to $3018.52.

Fed Steady, But Policy Uncertainty Lifts Bullion

The Federal Reserve held interest rates steady as expected, but Chair Jerome Powell’s post-meeting comments left the door open for future easing. Powell flagged ongoing concerns about elevated inflation and softening labor market indicators, reinforcing the perception that the Fed lacks a clear policy path forward. Markets are now pricing in up to 75 basis points of rate cuts before year-end, with expectations concentrated around the September meeting.

That uncertainty—paired with the Fed’s refusal to commit to a timeline—reinvigorated gold’s appeal as a hedge against monetary policy indecision. Bond yields remained range-bound, offering no resistance to gold’s advance.

Dollar Eases, Boosting Foreign Demand for Gold

The U.S. dollar slipped 0.3% during key sessions last week, briefly losing ground to major currencies including the yen and euro. This helped gold become cheaper for foreign buyers and supported fresh buying from Asia, particularly from China following the end of its national holiday. Although the dollar finished the week marginally higher overall, the midweek softness provided enough of a tailwind to lift bullion from recent lows.

Trade Tensions Persist, But Tariff Tone Softens

Gold found additional support from ongoing trade uncertainty. President Trump’s comments on tariffs kept traders on edge, though notably, his proposal of an 80% tariff on Chinese imports marked a reduction from the 145% figure previously floated. The moderation helped ease fears of a sharp escalation, especially as U.S. and Chinese officials prepared to meet in Switzerland over the weekend for de-escalation talks. These developments reduced the risk of a fresh trade shock, but still preserved gold’s value as a geopolitical hedge.

Other Key Factors Driving Last Week’s Gold Rally

• Safe-haven demand remained supported by broad geopolitical tensions and economic uncertainty, even as India-Pakistan military activity tapered following reports of a ceasefire.
• Central bank demand stayed strong, with China expanding FX quotas to facilitate additional commercial gold imports.
• Physical buying picked up in China after holidays, while Indian demand lagged due to high local prices and a weaker rupee.
• U.S. economic concerns gained traction, with Fed Governor Michael Barr warning that Trump’s tariff policies could fuel inflation, suppress growth, and raise unemployment later in the year.

Outlook: Gold Supported into Inflation Data and Powell Speech

The fundamental backdrop remains constructive for gold. With the Fed adopting a wait-and-see stance, markets will be focused on this week’s key U.S. data:

• Tuesday: April Consumer Price Index (CPI) – Core CPI expected at +0.2% m/m, +2.8% y/y.
• Thursday: Retail sales report – Consumer strength could affect inflation expectations.
• Thursday: Powell’s speech – Traders will be watching for any hint of a dovish pivot.

If inflation proves sticky or Powell signals discomfort with current labor market trends, expectations for rate cuts will likely strengthen, offering more support for gold. For now, policy ambiguity, geopolitical risks, and steady physical demand continue to provide a solid floor for prices.

More Information in our Economic Calendar.