Gold price stands firm near daily peak; looks to US PPI for fresh impetus

Gold price (XAU/USD) sticks to intraday gains through the first half of the European session, albeit it lacks follow-through and remains below the $3,350 level. Investors remain worried about the potential economic fallout from US President Donald Trump's trade tariffs. This, along with a modest US Dollar (USD) pullback from its highest level since June 23, touched on Tuesday, turns out to be a key factor lending some support to the commodity.

However, expectations that the Federal Reserve (Fed) will keep interest rates higher for longer act as a tailwind for the USD and hold back traders from placing aggressive bullish bets around the non-yielding Gold price. This, in turn, warrants some caution before positioning for any further appreciating move. Investors now look to the release of the US Producer Price Index (PPI) and speeches from influential FOMC members for a fresh impetus.

Daily Digest Market Movers: Gold price bulls seem non-committed amid reduced Fed rate cut bets

• The US Bureau of Labor Statistics reported on Tuesday that the headline Consumer Price Index (CPI) increased the most in five months, by 0.3% in June, and the yearly rate accelerated to 2.7% from 2.4% in May. Meanwhile, the core gauge, which excludes fluctuating food and energy costs, rose 2.9% YoY from 2.8% in the previous month.
• The data sparked concerns over the inflationary effects of US President Donald Trump's trade tariffs and reaffirmed bets that the Federal Reserve will keep rates higher for an extended period. This lifted the US Treasury bond yields higher and the US Dollar to its highest level since June 23, dragging the Gold price to a multi-day trough.
• Boston Fed President Susan Collins noted that it is challenging to set monetary policy right now amid uncertainty, and a solid economy gives the US central bank time to decide its next interest rate move. Tariffs could boost inflation over the second half of 2025 and push core inflation to around 3% by year's end, Boston added further.
• Separately, Dallas Fed President Lorie Logan said the base case is that monetary policy needs to hold tight for a while longer to bring inflation down. Logan added that tariff increases appear likely to create additional inflationary pressure for some time, and an early rate cut by the Fed risks deeper economic scars on a longer road to price stability.
• Meanwhile, Trump said on Tuesday that 200% tariffs on pharmaceutical imports will come by the month-end. This comes on top of Trump's tariff notices to more than 20 countries and a 50% tariff on copper imports last week, which keeps investors on edge and assists the safe-haven precious metal to attract some dip-buying on Wednesday.
• Traders now look forward to the release of the US Producer Price Index due later during the North American session. Apart from this, comments from influential FOMC members will drive the USD and provide a fresh impetus to the XAU/USD pair. The mixed fundamental backdrop, meanwhile, warrants caution for aggressive traders.

Gold price might continue to face stiff resistance and remain capped near the $3,365 supply zone

From a technical perspective, the commodity shows some resilience below the 100-period Simple Moving Average (SMA) on the 4-hour chart and, for now, seems to have stalled the retracement slide from a three-week top touched on Monday. That said, oscillators on the said chart are yet to confirm bullish bias and warrant some caution before positioning for further gains. Hence, any subsequent move up might confront an immediate hurdle near the $3,342-3,343 region, above which the Gold price could retest the $3,365-3,366 horizontal barrier. Some follow-through buying, however, would set the stage for a move towards reclaiming the $3,400 round figure.

On the flip side, weakness below the $3,320 area, or the weekly trough touched on Tuesday, is more likely to find decent support near the $3,300 round figure. This is followed by the $3,283-3,282 region, or over a one-week low touched last Tuesday, which, if broken, would make the Gold price vulnerable to accelerate the corrective fall towards the July swing low, around the $3,248-3,247 zone.