Gold rises above $4,400 as US inflation data takes centre stage

• Gold regains ground above $4,400 ahead of the July US CPI data.
• Elevated Oil prices amid uncertainty over the reopening of the Strait of Hormuz keep inflation risks in focus.
• The technical outlook stays bullish, although the RSI nears overbought territory.

Gold (XAU/USD) rebounds on Wednesday after closing in negative territory on Tuesday for only the second time in six trading days. Traders now await the US Consumer Price Index (CPI) data, due at 12:30 GMT, to see whether the bullish momentum will continue or a reversal will take shape. At the time of writing, XAU/USD trades around $4,417, up 1.11% on the day.

US inflation is expected to pick up slightly on a monthly basis in July, with headline CPI rising 0.1% and core CPI increasing 0.2%. However, the annual rates are forecast to ease to 3.4% and 2.5%, respectively.

Rabobank’s RaboResearch Global Economics & Markets team cautions that the benign US CPI consensus is unfolding against a far more turbulent geopolitical backdrop. The bank highlights that “after four crew and two rescuers were killed in a Houthi Red Sea attack on a ship and the US struck another in the Gulf of Oman ‘trying to break its Iran blockade’; Iran said Hormuz will stay closed unless the US meets its over-reach conditions.”

Meanwhile, diplomatic efforts continue, with Pakistan’s Interior Minister Mohsin Naqvi meeting Iranian President Masoud Pezeshkian and Foreign Minister Abbas Araghchi in Tehran as Islamabad seeks to revive stalled peace talks between the US and Iran.

Still, there is no sign of an immediate agreement to reopen the Strait of Hormuz. West Texas Intermediate (WTI) trades around $82, holding near a one-and-a-half-week high. The US Energy Information Administration (EIA) also raised its 2026 average WTI price forecast to $80.88 per barrel from $76.26.

With inflation running above the Federal Reserve’s (Fed) 2% target and higher Oil prices adding to upside risks, the CPI report will help traders assess the Fed’s interest-rate path, particularly ahead of the September meeting. According to the CME FedWatch Tool, markets currently see a 48% chance of a rate hike.

A hotter-than-expected inflation reading could strengthen rate-hike bets, lifting the US Dollar and Treasury yields while weighing on the non-yielding metal. Conversely, softer data could prompt traders to further scale back expectations of a hike, keeping Gold’s near-term outlook tilted to the upside.

Technical analysis: XAU/USD approaches the 200-day SMA

XAU/USD extends its advance above the 50-day Simple Moving Average (SMA) and trades just above the 100-day SMA, keeping the near-term bias bullish.

The pair is now approaching the 200-day SMA at $4,500, which acts as the next significant overhead barrier, while the Relative Strength Index (RSI) at 68 flirts with overbought territory, hinting that the latest advance is strong but could be prone to consolidation.

The Average Directional Index (ADX) at 30 points to a moderately directional market, reinforcing the idea of a sustained bullish phase as long as price remains above the short- and medium-term averages.

On the downside, immediate support is seen at the 100-day SMA near $4,388, with a deeper cushion at the 50-day SMA around $4,148, where buyers would be expected to re-emerge on corrective pullbacks. Further below, a more structural floor is located at the horizontal support line at $4,000.

On the topside, the 200-day SMA at $4,500 is the key resistance level that bulls need to reclaim to extend the uptrend, and a failure to clear this barrier would likely keep price consolidating above the nearby moving-average support band.

(The technical analysis of this story was written with the help of an AI tool. Know more.)