Gold Price Forecast: XAU/USD eyes $4,100 and US CPI as US-Iran tensions escalate
- Gold sits at three-month lows below $4,200 early Wednesday, with eyes on US CPI data.
- The US Dollar holds the recent rebound amid escalating Middle East tensions, hawkish Fed bets.
- Technically, Gold stays vulnerable, but oversold daily RSI warrants caution for sellers.
Gold is under intense selling pressure, accelerating its decline into a second straight day on Wednesday. The bright metal keeps renewing three-month lows below $4,200 as traders eagerly await the US Consumer Price Index (CPI) data due later in the day.
Gold keeps eyes on Mideast news, US CPI report
Gold sellers remain in complete control heading into the US CPI showdown, as the US Dollar (USD) consolidates the overnight rebound driven by a renewed risk aversion following a fresh escalation in the Middle East conflict.
Hopes for an end to the months-long war got squashed after the United States (US) launched strikes against Iran after President Donald Trump accused Tehran of shooting down an American Apache helicopter in the Strait of Hormuz.
In response, the Iranian Islamic Revolutionary Guard Corps (IRGC) said on Wednesday that it struck 21 US military targets across the Middle East. Iran's Foreign Minister Abbas Araghchi warned the US to leave the region or face consequences.
Gold traders look forward to the US CPI inflation data to gauge the impact of the war and whether the US Federal Reserve (Fed) will opt for a rate hike before the end of this year.
Markets have priced in about a 70% chance of at least one Fed rate hike in 2026, as per the CME Group’s FedWatch Tool.
The annual core CPI inflation in the US is expected to accelerate to 2.9% in May from 2.8% in April. The monthly core CPI is likely to rise by 0.3% in May after a 0.4% increase in April.
These core measures exclude volatile items like food and energy and provide a clear picture to the Fed about the real inflation.
A hotter-than-expected US core CPI inflation readings would reaffirm Fed rate hike prospects, boosting the Greenback further, while dragging Gold into deeper waters. Conversely, softer CPI prints could push back against these hawkish Fed expectations, offering some temporary relief to Gold buyers amid a chaotic geopolitical environment.
Gold typically benefits from a low-interest-rate regime, and hence, this CPI report to determine the Fed’s path forward on rates.
However, any Gold price reaction to the US CPI data could be limited if the Middle East headlines dictate risk sentiment and the dynamics of the USD.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,178.33, extending a pronounced bearish phase with spot holding below all its major simple moving averages. The 21-day SMA at $4,479.76, the 50-day SMA at $4,609.20 and the 100-day SMA at $4,782.66, together with the 200-day SMA at $4,444.24, all sit overhead and suggest rallies are likely to meet supply rather than signal a base. The Relative Strength Index (14) has slipped into oversold territory near 28, hinting that downside momentum is stretched but not yet signaling a clear reversal.
On the topside, initial resistance is reinforced by the 200-day SMA at $4,444.24, with the 21-day SMA at $4,479.76 forming the next cap if a corrective bounce develops. Above that, the 50-day SMA at $4,609.20 and the 100-day SMA at $4,782.66 define a broader bearish zone that would need to be overcome to ease the current downside bias. With no nearby moving-average-based supports below the market, any further weakness would likely probe prior price lows and psychological round figures as traders wait for either stabilization in momentum or a recovery back toward the clustered daily averages.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Consumer Price Index ex Food & Energy (MoM)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The MoM print compares the prices of goods in the reference month to the previous month.The CPI Ex Food & Energy excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Jun 10, 2026 12:30
Frequency: Monthly
Consensus: 0.3%
Previous: 0.4%
Source: US Bureau of Labor Statistics
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
