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.

Dhwani Mehta FXStreet

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.

Why it matters to traders?

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.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.