Gold Price Forecast: Will XAU/USD take out key $3,377 barrier on US inflation data?

Gold price has found some dip-buying demand early Tuesday as traders look to reposition ahead of the critical US Consumer Price Index (CPI) data release.

Gold price remains hopeful, with eyes on US CPI data

Amid US President Donald Trump’s fresh tariff threats announced late Monday and his latest criticism of Federal Reserve Chairman Jerome Powell, Gold traders resorted to profit-taking after the bright metal hit a three-week high of $3,375 while bracing for the US inflation report for June.

Trump threatened to impose 100% tariffs on Russia if President Vladimir Putin does not agree to a deal to end his invasion of Ukraine in 50 days, per Bloomberg. 

Meanwhile, the US President renewed his attacks on Powell, noting that “interest rates should be at 1% or lower, rather than the 4.25% to 4.50% range the Fed has kept the key rate at so far this year.”

Markets now price in 50 basis points of Fed interest rate cuts by year-end, with the first reduction foreseen in September.

However, it remains to be seen if these expectations hold ground following the US CPI data publication.

Economists are expecting the US annual CPI and core CPI to accelerate 2.7% and 3% in June, reflecting the tariff impact feeding through prices. Meanwhile, the monthly CPI and core CPI inflation figures are set to rise to 0.3% in the same period.

Hotter-than-expected US CPI monthly or annual readings could reinforce the Fed’s patient outlook, pushing back against expectations of two Fed rate cuts this year.

This scenario could help the US Dollar (USD) extend its recovery at the expense of the non-yielding Gold price.

Alternatively, if the data come in below forecasts, it could provide a fresh tailwind to the Gold price on renewed bets that the Fed will remain on track for two rate cuts.

Gold price technical analysis: Daily chart

Gold price remains poised to retest the 23.6% Fibonacci Retracement (Fibo) level of the April record rally at $3377, following a rebound from the 21-day Simple Moving Average (SMA) support at $3,339.

The 14-day Relative Strength Index (RSI) inches higher while above the midline, currently near 54, indicating additional upside potential.

In case buyers manage to take out the 23.6% Fibo level at $3,377 on a daily candlestick basis, a fresh uptrend will initiate toward the $3,400 round level and $3,440 static resistance.

If sellers jump in at higher levels, Gold price could fall back to attack the 21-day SMA at $3,339.

A sustained break below that level will put the 50-day SMA of $3,325 at risk, below which the 38.2% Fibo level of the same rally at $3,297 will come into the picture once again.