Gold price eyes CPI data as inflation risks boost sentiment

Muhammad Umair, PhD Gold Predictors

Gold (XAUUSD) prices increased 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). The gold price trades around $2,675 and shows positive momentum within the ascending channel.

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.

Gold price analysis: Trends amid inflation risks

The daily chart reveals that Gold remains within a defined ascending channel, as shown below. Recent price action saw a rebound from the channel's lower boundary near $2,640, aligning with the trendline support. This recovery indicates sustained bullish momentum despite recent headwinds.

The key patterns observed include a series of higher lows, reinforcing the uptrend. The red line highlights a neckline from previous rounded bottom formations, acting as a support-turned-resistance zone. Any break above $2,720 could pave the way for further gains, potentially targeting the channel's upper boundary near $2,800.

Conversely, a failure to hold above $2,640 may see prices retesting the $2,600 psychological level. This aligns with the Fed's monetary policy expectations and the upcoming CPI data release.

Market participants should also monitor the dashed midline of the ascending channel. This zone often acts as a dynamic resistance or support during bullish rallies or corrective pullbacks.

Conclusion

Gold prices are poised at a critical juncture as traders await key economic data and geopolitical developments. A cooler-than-expected CPI report could strengthen the case for Fed easing, boosting bullion further. However, the potential inflationary impact of proposed Trump tariffs remains a wildcard, with the possibility of reigniting price volatility. Gold's trajectory remains closely tied to the interplay between inflation data and Federal Reserve policy expectations.

Unlock exclusive gold and silver trading signals and updates that most investors don’t see. Join our free newsletter now!

Author

Muhammad Umair, PhD

Gold Predictors

Muhammad Umair is a financial markets analyst and investor who focuses on the forex and precious metals markets.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.