Gold Price Forecast: XAU/USD in wait-and-see mode near record highs

XAU/USD Current price: $3,643.25

• The United States Producer Price Index was softer-than-anticipated in August.
• The US will release the August Consumer Price Index on Thursday.
• XAU/USD holds within familiar levels ahead of US first-tier figures.

Spot Gold saw little action throughout Wednesday, with the XAU/USD pair stuck below the $3,650. The bright metal started the day with a soft tone amid broad US Dollar (USD) demand, but found an intraday bottom at $3,620.48. The USD lost ground early in the American session, although price action across the FX board remains limited ahead of the release of first-tier data, which can affect the Federal Reserve (Fed) monetary policy decision, scheduled for release next week.

The United States (US) published the August Producer Price Index (PPI), which showed that annualized inflation at producers’ levels rose by 2.6%, down from the 3.3% posted in July. The core annual figure printed at 2.8%, easing from a revised 3.4% previously, while on a monthly basis, the PPI declined by 0.1%. The Consumer Price Index (CPI) for the same month is scheduled for release on Thursday.

The figures were below expected, and quickly triggered comments from US President Donald Trump: “Just out: No Inflation!!! “Too Late” must lower the RATE, BIG, right now. Powell is a total disaster, who doesn’t have a clue!!! President DJT,” Trump shared on Truth Social.

Other than that, President Trump suffered a setback, as a US court allowed Fed’s official, Lisa Cook, to continue operating as a member of the Board. Trump “fired” Cook over fraud allegations, but Cook appealed the decision and so far, retains her seat.

Also, the Labor Department’s Office of Inspector General said it is reviewing the “challenges” that the Bureau of Labor Statistics (BLS) is facing in its data-collection efforts. Trump fired the BLS's former head following the weak July monthly job report after claiming the numbers were wrong. Trump is quite unhappy with the large downward revisions to new jobs estimates.

XAU/USD short-term technical outlook

From a technical point of view, XAU/USD has to extend its advance. In the daily chart, the pair develops well above its moving averages, with a bullish 20 Simple Moving Average (SMA) accelerating north above the longer ones. At the same time, technical indicators ticked higher after a modest downward correction, still within extreme overbought levels.

In the near term, and according to the 4-hour chart, XAU/USD entered a consolidative phase, yet the risk remains skewed to the upside. The bright metal trades well above all its moving averages, with a bullish 20 SMA providing near-term support at around $3,625. The 100 and 200 SMAs also advance, yet far below the shorter one. Technical indicators have turned south within positive levels, reflecting the lack of upward momentum rather than hinting at an upcoming slide.

Support levels: 3,638.10 3,625.85 3,608.40

Resistance levels: 3,650.00 3,675.00 3,690.00