Gold is reverting to the $4,400 level in Asia on Thursday after facing rejection at $4,450 or fresh ten-week highs earlier in the session.
Attention now turns to the US Producer Price Index (PPI) data for more signs of cooling inflation, particularly after a mild US Consumer Price Index (CPI) report.
Gold looks to US PPI inflation for next leg up
The headline annual CPI inflation eased to 3.4% in July from 3.5% in June, coming in line with estimates.
The closely watched core annual CPI also matched expectations, increasing by 2.5% in July. Meanwhile, the monthly core CPI rose by 0.2% in the same period, following a flat reading in June.
The benign inflation readings further reduced bets for a US Federal Reserve (Fed) interest rate hike in September, triggering a big sell-off in the US Dollar (USD) alongside US Treasury bond yields, bolstering the ongoing Gold price uptrend toward $4,450.
Traders are now pricing in only a 40% probability of such a move at the September meeting, down from about 54% seen a week before, according to the CME FedWatch Tool.
According to TD Securities, the latest inflation data should “continue to bring relief to the Fed regarding the need for tighter policy, at least in the near horizon.” The bank points to “signs of normalization in services prices along with tariff pass-through that remains under control” as developments that “bode well for concerns around sticky core inflation.” On that basis, TD Securities reiterates that “all in, we remain of the view that the Fed will keep its policy stance unchanged this year,” reinforcing expectations that current policy settings will be maintained despite earlier worries over persistent price pressures.
However, Gold prices quickly pulled back as Middle East tensions resurfaced after a senior Iranian source said that there had been no progress in talks to revive the interim deal agreed in June and to define a time frame for its implementation.
In response, US President Donald Trump said in a post on Truth Social that the US has “total control” over the Strait of Hormuz, dismissing Iranian statements on the standoff as “fake news,” adding that Tehran is “all talk and no action” and is “the Bully of the Middle East No Longer.”
In Thursday’s trading so far, Gold renewed ten-week highs at $4,450 as Asian traders hit their desks and reacted positively to the mild US CPI readings, which raised doubts about an imminent Fed rate hike. Retreating Oil prices also offered additional impetus to Gold bulls.
However, they seem to be taking a breather after the recent rally as traders look to adjust their positions again ahead of the US PPI inflation release. The data could confirm the easing trend in inflation, having significant implications for Fed rate hike expectations.
Gold traders will also closely monitor developments in the Middle East, which could fuel a brief corrective downside for the bright metal before dip-buying emerges amid a bullish daily technical setup.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,408.48. The metal holds a bullish near‑term bias as it stands above the short- and medium-term simple moving averages (SMAs), with the 21-day SMA at $4,151.01 and the 50-day SMA at $4,146.69 underpinning the advance, while the 100-day SMA at $4,387.53 has been reclaimed as immediate support. The Relative Strength Index (14) at 67.49 flirts with overbought territory, suggesting strong but potentially stretched upside momentum as price consolidates near record highs.
On the topside, initial resistance is seen at the longer-term 200-day simple moving average at $4,502.95, which caps the current rally and marks the next hurdle for bulls. On the downside, immediate support is provided by the 100-day SMA at $4,387.53, with the 21-day and 50-day SMAs clustered around $4,151–4,147 acting as a deeper demand zone should a corrective pullback develop.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
Producer Price Index (YoY)
The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).
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