• Gold rebounds from weekly low, fueled by hopes for looser Fed policy after weak PPI.
  • Focus on upcoming CPI; cooler report could boost chances for rate cuts.
  • Potential Trump tariffs pose a risk to inflation, impacting Gold and market sentiment.

Gold prices edged higher on Tuesday after data from the United States (US) showed that prices paid by producers cooled off. This kept traders hopeful for additional monetary policy easing by the US Federal Reserve (Fed). At the time of writing, the XAU/USD trades at $2,675, up 0.46%.

The yellow metal recovered after beginning the week on the back foot, down over 1%. The US Bureau of Labor Statistics (BLS) revealed that the Producer Price Index (PPI) increased but missed estimates for a higher print. This exacerbated Gold’s jump as traders grew optimistic that if the Consumer Price Index (CPI) report on Wednesday comes cooler than foreseen, it could increase the Fed’s chances of easing policy during the year.

Market participants are eyeing the CPI release on Wednesday. If December prints are below the prior month’s 2.7% number, it could indicate that the disinflation process continues. Inflation has risen since October to 2.6%, following September’s 2.4% YoY increase.

Traders had priced in 29.4 basis points of easing by the Federal Reserve in 2025. But a cool CPI report could bolster bullion prices.

Earlier, Kansas City Fed President Jeffrey Schmid stated that the Fed would act if Trump’s tariffs threw inflation or jobs off course.

In six days, US President-elect Donald Trump will take office. He has threatened to impose universal tariffs, though focused mainly on China, Canada and Mexico. If he goes ahead with this, analysts have mentioned that a trade war could reignite inflation.

Bullion prices are also taking a hit amid good news of a possible deal that could end Gaza's war, according to Reuters, which cited an official briefed on the matter.

In the US, key data releases include consumer inflation figures, Retail Sales and jobless claims for the week ending January 11.

Daily digest market movers: Gold price advances on steady US yields

  • Gold price shrugs off higher US real yields, which remain at around 2.34%.
  • The US Dollar retreated after the data, with the US Dollar Index (DXY) hitting 109.21, down 0.26%.
  • The US 10-year Treasury bond yield remains unchanged at 4.794%.
  • The US PPI in December rose 3.3% YoY, below forecasts of 3.4%. Excluding volatile items, the so-called Core PPI expanded by 3.5% YoY, up from November’s figures but beneath 3.8% expectations.

XAU/USD technical outlook: Gold price soars above $2,650 as bulls stepped in

Gold price uptrend resumed after a ‘bearish engulfing’ chart pattern formed, inviting buyers to step in and increase prices. If Bullion clears $2,700, the next resistance would be the December 12 peak of $2,726, followed by the record high at $2,790.

Conversely, if XAU/USD drops below $2,650, the next support would be the 50-day Simple Moving Average (SMA) at $2,643, followed by the 100-day SMA at $2,633.

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review

Recommended content


Recommended content

Editors’ Picks

EUR/USD remains offered in the low-1.0900s

EUR/USD remains offered in the low-1.0900s

The generalised selling pressure continues to weigh on the risk complex, pushing EUR/USD back toward the 1.0900 support level amid a growing risk-off mood, as traders assess President Trump’s reciprocal tariffs and their impact on economic activity.

EUR/USD News
GBP/USD retreats further and breaks below 1.2800

GBP/USD retreats further and breaks below 1.2800

The US Dollar is picking up extra pace and flirting with daily highs, sending GBP/USD to multi-week lows near 1.2770 in a context where safe-haven demand continues to dictate sentiment amid the chaos of US tariffs.

GBP/USD News
Gold recedes to four-week lows near $2,950

Gold recedes to four-week lows near $2,950

The persistent selling pressure is now dragging Gold prices to the area of fresh multi-week troughs near the $2,950 mark per troy ounce, always amid the continuation of the recovery in the US Dollar, highr US yields across the curve and unabated tariff tensions.

Gold News
US stock market suddenly reverses higher after rumor of 90-day tariff pause before sinking again

US stock market suddenly reverses higher after rumor of 90-day tariff pause before sinking again Premium

NASDAQ sinks 4% before shooting higher on tariff pause rumor. CNBC says White House unaware of tariff pause rumor. S&P 500 sinks to January 2024 level. Bank of America cuts its year-end target for S&P 500 by 16%.

Read more
Strategic implications of “Liberation Day”

Strategic implications of “Liberation Day”

Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025