gold prices are attempting to recover from near weekly lows of approximately $3,341, as markets await the upcoming U.S. Consumer Price Index (CPI) data for July. The metal’s recent oscillation reflects investor cautiousness ahead of inflation figures that could influence Federal Reserve policy on interest rate adjustments.
Support for gold has been bolstered somewhat by an extension of the trade truce between the United States and China, which now extends until November 10. China also eased certain export controls on U.S. firms for a period of 90 days, helping to mitigate some trade-related concerns. This thaw in relations has dampened the U.S. dollar’s recent recovery, providing a tentative boost to gold prices.
Market participants are keenly focused on the upcoming inflation data, which is expected to show a year-over-year increase of approximately 2.8% in July, slightly higher than June’s 2.7%. The core CPI, excluding volatile food and energy prices, is anticipated to rise to 3%, surpassing the previous 2.9%. Monthly figures are expected to accelerate modestly, with CPI rising by 0.2% and core CPI by 0.3%.
A softer-than-expected inflation reading could reinforce dovish expectations for the Federal Reserve, potentially leading to a decline in the U.S. dollar and a reversal higher in gold prices. Conversely, if inflation appears hotter than anticipated, this could sustain the dollar’s recent recovery and exert downward pressure on gold , which does not yield interest.
Technically, the price remains at a crossroads. The daily RSI is close to neutral levels, indicating a lack of clear directional trends. Support levels are seen around the recent lows, with the key vicinity at approximately $3,355, where the 21-day and 50-day moving averages converge. A stronger-than-expected CPI could push gold toward lower support levels near $3,296, with a potential test of the July 30 low around $3,268. Alternatively, a softer inflation report might enable gold to challenge rising trendline resistance near $3,403, with an initial target at approximately $3,440.
