Gold Prices Await US CPI Data with Fed's Interest Rate Outlook

The upcoming US Consumer Price Index (CPI) release carries significant weight as it guides the Federal Reserve's future interest rate decisions, following the expected pause in September. A robust CPI reading would reinforce market expectations of further Fed policy tightening, potentially pushing gold prices lower. It's important to note that markets have factored in the possibility of a 25 basis points rate increase by year-end.

Optimistic recent US macroeconomic data bolstered confidence in a resilient economy, supporting the Fed's stance on keeping interest rates elevated. This outlook has bolstered US Treasury bond yields and boosted the US Dollar's value, though the Greenback saw some profit-taking on Monday.

Additionally, a cautious sentiment lingers in equity markets, enhancing gold's safe-haven appeal. Concerns persist about China's economic conditions and rising borrowing costs, prompting some investors to seek refuge in gold.

Traders are exercising caution before the US CPI report and the European Central Bank (ECB) meeting later this week. These events will shape gold's direction, but uncertainty remains about the ECB's decision amid inflation and economic concerns in the Eurozone.

Investors should await strong buying signals before betting on gold's recovery from its recent low near $1,885. These upcoming data and central bank actions will dictate gold's next move.

Gold found support at the 100MA on the 4-hour chart as the dollar retraced back yesterday, but the general view is still bearish for gold. The next support is at 1910, and a breakout of this support level will take the price toward 1900, followed by 1885.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1920	1942	1931	1910	1900	1885