Gold Prices Rebound Ahead of US CPI Data
The CPI data release is crucial, as it could impact the US interest rates and subsequently influence gold prices, which have an inverse relationship with US interest rates. A potential Fed rate cut is seen as unlikely, and the market is bearish below $3201, making the next key driver the CPI data.
Gold prices have rebounded after a 3% drop, currently trading at $3253.38, up 0.57%, as traders buy safe-haven protection ahead of the US CPI data, which could shape expectations for Fed policy and influence the gold price.
The US CPI report is expected to be released at 0.3% MoM, and a hot print could strengthen the dollar and drag gold toward $3145 support. Citi Research downgraded its 3-month gold price target from $3,500 to $3,150, citing reduced geopolitical risk and a likely short-term consolidation between $3,000 and $3,300. The market remains bearish below $3201, and the next key driver will be the CPI data.
Gold price technical analysis suggests a potential rebound to $3,289 and $3,341, with support at $3,195 and $3,167. In India, gold prices have surged over 4% in the past week, with MCX gold rates reaching ₹96,535 per 10 gm. Experts attribute the rise to the Indian Rupee's depreciation and safe-haven demand amid economic uncertainties.
The US Fed's decision to maintain interest rates and the Bank of England's rate cut have also boosted gold prices. Safe-haven demand is fueled by tariff uncertainty, rising India-Pakistan tensions, and geopolitical risks. The Indian Rupee's appreciation and US-China trade talks will influence gold prices, with experts expecting prices to remain range-bound between ₹94,500 and ₹97,500.
As the market awaits the release of the US CPI data, gold prices are expected to remain volatile, with traders closely watching the economic indicators and geopolitical developments that could impact the precious metal's price.