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.