Gold Price Refreshes Weekly High Reaching $2,528 Eyes Resistance Ahead of US CPI Data

Hey legends, just pls let me share some of my thoughts on Gold today; including TA analysis and some fundamentals, alright, lets dive into my analysis!

For the price, Gold gained momentum for the third consecutive day on Wednesday, hitting a new weekly peak in the $2,520-$2,528 range during the Asian trading session. However, the precious metal remains within a multi-week trading range as market participants await the release of key US CPI data later today.

My XAU/USD Technical Analysis take

Still, from a short-term technical perspective, I reckon the outlook for Gold remains largely unchanged. The price of Gold continues to show promise, having closed above the 21-day Simple Moving Average (SMA), now sitting at $2,503, for the second consecutive session on Tuesday.

Also, the 14-day RSI is trending upward and remains well above the 50 level, reinforcing a bullish outlook.

Well, and I REALLY THINK Gold buyers are now targeting a decisive break above the record high of $2,532. Should this level be breached, the next target would be the psychological resistance at $2,550.

On the flip side, if Gold faces rejection around the $2,530 resistance area again, a pullback could be on the cards. A daily close below the 21-day SMA at $2,503 would shift the near-term outlook to bearish.

A break below this would then focus attention on last week's low at $2,472, followed by the previous symmetrical triangle resistance-turned-support around $2,462.

And here are some of Gold’s Fundamental Overview for you legends

Gold traders remain cautious, refraining from making significant moves ahead of the release of US inflation data, which will be crucial in gauging the Fed’s approach to interest rate cuts at its upcoming meeting. The CPI figures will play a key role in determining the next direction for Gold, as it hovers near the all-time high of $2,532 reached on August 20.

Economists expect the US CPI to rise 2.6% year-over-year (YoY) in August, down from the 2.9% increase seen in July. Core CPI inflation is expected to remain unchanged at 3.2% YoY. On a monthly basis, both headline and core CPIs are forecasted to grow 0.2%, the same as in the previous month.

A stronger-than-expected inflation print could prompt a recovery in the US Dollar, which would likely weigh on Gold prices and diminish hopes for a larger-than-expected Fed rate cut. Conversely, weaker-than-expected CPI data could revive market expectations for a 50 basis point (bps) rate cut, which would weaken the US Dollar and potentially push Gold prices to new record highs.

Currently, market pricing shows a 33% probability of a 50 bps rate cut, while the likelihood of a 25 bps cut is 67%, according to the CME Group’s FedWatch Tool.

Ahead of the key CPI release, Gold is being buoyed by renewed weakness in the US Dollar, driven largely by a sharp decline in USD/JPY. The Japanese Yen surged to an eight-month high against the Dollar, nearing 141.50, following hawkish comments from Bank of Japan (BoJ) board member Junko Nagakawa. Her remarks underscored the BoJ's readiness to hike interest rates further, highlighting the policy divergence between the Fed and BoJ.

Meanwhile, the first US presidential debate between former President Donald Trump and Democratic nominee Kamala Harris in Pennsylvania had little impact on financial markets, as investors remained cautious. This led to increased demand for US government bonds, pushing Treasury yields lower and supporting Gold’s advance.