Gold Steadies Near $4,370 Ahead of Key US CPI Data Print
Gold eases from a two-month high above $4,430 as traders lock in profit ahead of Wednesday's US CPI print, the next catalyst for the Fed's rate path.
Key Questions & Answers
Why did gold recover above $4,350?
US employers cut 23,000 jobs in July, a shock contraction that slashed the market's odds of a September Fed rate hike from about 67% to under 45%, driving flows into gold.
What is gold's price today?
Gold trades near $4,370 an ounce, down from a two-month high above $4,430 hit earlier today.
What is the biggest risk for gold right now?
A hotter-than-expected US CPI print on Wednesday, which would revive Fed rate-hike bets and pressure gold lower.
What are the key technical levels for gold?
$4,400 is acting as a near-term ceiling after gold's breakout from its multi-month descending channel; $4,200 is the key support that would need to hold to keep that breakout intact.
Gold is trading near $4,370 an ounce on Tuesday, easing back from a two-month high above $4,430 hit earlier today, as traders take profit ahead of Wednesday's US Consumer Price Index (CPI) release.
The pullback follows one of gold's strongest weeks since January. Data on August 7 showed the US economy unexpectedly lost 23,000 jobs in July, with June's figure revised down too. The miss knocked market expectations for a September Fed rate hike from roughly 67% to under 45%, pulling flows into non-yielding gold.
Attention now shifts to inflation. July CPI is due Wednesday, followed by the Producer Price Index on Thursday. A soft print would reinforce bets that the Fed stays on hold and could support a fresh push toward $4,400 and beyond. A hot reading would revive rate-hike bets and pressure gold lower.
Geopolitics remains a live undercurrent. Continued disruption around the Bab el-Mandeb Strait and stalled US-Iran talks have kept oil prices firm, a factor that could feed into Wednesday's inflation data and complicate the Fed's path either way.
Beyond this week's data, central bank buying and a shift from ETF outflows to net inflows continue to underpin demand for gold. The People's Bank of China added 20 tons of gold in July, its 20th consecutive month of reserve building. Global gold ETFs added a fresh source of demand too, swinging to a $3 billion inflow in July after months of consecutive outflows.
CHART IN FOCUS Spot Gold - Daily
Gold broke its downtrend, then moved sideways under $4,200. It has since cleared $4,200, but $4,400 is capping the move. A close above $4,400 could see bulls target $4,600, while a drop back below $4,200 would call the breakout into question.
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