Gold bounces back as inflation remains steady
|Spot gold remained around $3,349 per ounce as traders analyzed the latest US CPI report, solidifying expectations of a Federal Reserve rate cut next month.
Headline annual inflation stayed steady at 2.7% in July, slightly below forecasts of 2.8%, while core inflation unexpectedly accelerated to 3.1%. The data indicates that tariff-related inflationary pressures remain modest for now, providing the Federal Reserve with room to implement a 25-basis point rate cut in September.
The probability of a rate cut has increased from 88% late yesterday to nearly 93%.
Trump announced On Monday that he would not impose tariffs on gold, a decision welcomed by global bullion markets that ended days of speculation about the yellow metal being caught up in the ongoing trade tensions.
Technical analysis perspective:
Gold / US Dollar:
- Gold is currently trading within a large symmetrical triangle on the four-hour charts.
- The descending resistance line from the April 2025 all-time high of 3,500 is acting as a key barrier around 3,400 to 3,420.
- Gold rebounded after testing the upward trendline established from the May 2025 lows of 3,120, now intersecting around the 3,330 to 3,305 level.
- Prices bounced off the 3,331 level, which is near the key support zone of 3,330.
- Currently, gold is likely to oscillate between the 3,400 - 3,430 and 3,330 - 3,305 ranges.
- A sustained breakout above or below these levels would determine the next directional move.
Gold 4 Hourly chart:
GLD (SPDR Gold trust) ETF:
- GLD has respected the rising trendline support from the May 2025 low of 292.87, now trading between 305 and 302.50.
- The ETF formed a double top pattern last Friday, leading to a decline with a downside price gap on Monday.
- GLD is headed toward the 305 to 302.50 range this week.
GLD 4 Hourly chart:
GLD Seasonality:
Since 2006, GLD has posted an August gain of 1.5% in 60% of the years, while September has seen a decline of 0.80% in 37% of the years.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.