- XAU/USD rose past the $1,930 level on Tuesday, piercing through the 20-day SMA at $1,926.
- Markets expect headline CPI to drop to 3.1% YoY in June and the Core to 5%.
- Declining US yields favour Gold prices.
On Tuesday, the Gold spot XAU/USD gained ground and consolidated above the 20-day Simple Moving Average (SMA) for the first time since May. Ahead of key US Consumer Price Index (CPI) figures on Wednesday, US yields are declining giving room to the non-yielding metal to advance.
US CPI figures to define Fed’s next steps
On Wednesday’s session, the US Bureau of Labor Statistics will release CPI data from June. The headline figure is expected to fall to 3.1% YoY from the previous 4% and the Core measure to 5% from 5.3%. Meanwhile, the US Treasury bond yields, which could be seen as the opportunity cost of holding gold, trade weak, with the 2-year standing at 4.86% and the 5 and 10-year yields falling to 4.22% and 3.96%, respectively.
That being said, hawkish bets on the Federal Reserve (Fed) remain steady. According to the FedWatch tool, investors have already priced in a 25 basis point (bps) hike in the next Fed July meeting and looking forward, they discount a 35% probability of another 25 bps in 2023. However, CPI figures may impact those expectations affecting both the US bond market and the yellow metal price dynamics.
XAU/USD Levels to watch
The daily chart suggests that the buyers have taken the lead over the sellers in the short term after conquering the 20-day SMA. However, the bulls still have some work to do to confirm the positive bias and need to retake the 100-day SMA, currently at $1,950. Meanwhile, the Relative Strength Index (RSI) points north, still below its midline, while the Moving Average Convergence Divergence (MACD) prints higher green bars.
Resistance levels: $1,940, 1,950 (100-day SMA), $1,970.
Support levels: $1,915, $1,900, $1,890.
XAU/USD Daily chart
-638247004449639299.png)
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.
Recommended content
Editors’ Picks
Gold trades near record-high, stays within a touching distance of $3,100
Gold clings to daily gains and trades near the record-high it set above $3,080 earlier in the day. Although the data from the US showed that core PCE inflation rose at a stronger pace than expected in February, it failed to boost the USD.
EUR/USD turns positive above 1.0800
The loss of momentum in the US Dollar allows some recovery in the risk-associated universe on Friday, encouraging EUR/USD to regain the 1.0800 barrier and beyond, or daily tops.
GBP/USD picks up pace and retests 1.2960
GBP/USD now capitalises on the Greenback's knee-jerk and advances to the area of daily peaks in the 1.2960-1.2970 band, helped at the same time by auspicious results from UK Retail Sales.
Donald Trump’s tariff policies set to increase market uncertainty and risk-off sentiment
US President Donald Trump’s tariff policies are expected to escalate market uncertainty and risk-off sentiment, with the Kobeissi Letter’s post on X this week cautioning that while markets may view the April 2 tariffs as the "end of uncertainty," it anticipates increased volatility.
US: Trump's 'Liberation day' – What to expect?
Trump has so far enacted tariff changes that have lifted the trade-weighted average tariff rate on all US imports by around 5.5-6.0%-points. While re-rerouting of trade will decrease the effectiveness of tariffs over time, the current level is already close to the highest since the second world war.
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.