Gold prices remained subdued on Wednesday as traders awaited the US Consumer Price Index (CPI) data release, which is expected to provide direction for the Federal Reserve’s interest rate policy.
The CPI data, due at 1:30PM GMT, is forecast to show a 2.9% year-on-year increase, up from 2.7% in November. A monthly rise of 0.3% is also expected. These figures are critical for shaping expectations around the Fed’s policy path.
A higher-than-expected print could strengthen the US dollar, applying downward pressure on gold prices, while weaker data could support XAUUSD, potentially challenging the upper resistance near $2,679.
Picture: XAUUSD consolidates tightly between $2,656 and $2,679, with flattening MACD momentum and converging MAs reflecting cautious market sentiment ahead of CPI data. To learn more, visit the VT Markets app.
Looking at the 15-minute chart, XAUUSD continues to consolidate within a narrow range of $2,656.73 to $2,679.35. The moving averages (5, 10, and 30-period) show further convergence, underlining indecision among traders as they await key economic data.
The MACD histogram suggests waning bullish momentum, with the potential for a bearish crossover forming as the lines flatten.
These indicators highlight a market poised for a breakout, with traders likely monitoring for a decisive move beyond the current range following the CPI data release.
The Price Index (PPI Producer) earlier this week showed a 3.3% annual rise, supporting speculation of continued Federal Reserve easing. However, the CPI data will play a more decisive role.
Traders are also watching inflation expectations tied to President-elect Donald Trump’s upcoming second term, with analysts predicting fiscal policies that could increase inflationary pressures.
As XAUUSD consolidates within a narrow range, the upcoming CPI data will likely trigger heightened volatility, determining whether gold prices can challenge resistance levels or test deeper support zones.
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