Gold Awaits Inflation

Gold Holds Near $4,400 as Traders Await Key U.S. Inflation Data

Gold prices were little changed on Thursday as investors awaited crucial U.S. inflation data for clues on whether the Federal Reserve will raise interest rates at its policy meeting next week.

Higher Treasury yields and escalating tensions in the Middle East continued to weigh on the precious metal in the short term. However, a weaker U.S. dollar and sustained long-term demand for bullion helped provide underlying support.

As of 08:43 WIB, spot gold (XAU/USD) slipped 0.1% to $4,398.53 per ounce, while Gold Futures declined 0.4% to $4,442.00. Silver (XAG/USD) was largely unchanged at $67.28 per ounce, while platinum (XPT/USD) fell 0.6% to $1,888.23. Meanwhile, the U.S. Dollar Index remained steady at 98.81.

Treasury Yields and Middle East Risks Weigh on Gold

Gold has traded within a relatively narrow range around the $4,400 level in recent weeks after recovering from lows near $4,000 recorded in July.

Investors continue to balance gold’s long-term appeal as a portfolio hedge against short-term pressures from rising bond yields and worsening geopolitical tensions in the Middle East.

The benchmark U.S. 10-year Treasury yield moved higher after the government’s latest plan to purchase up to $6 billion in long-dated debt failed to significantly influence bond markets. Rising yields typically reduce the attractiveness of non-yielding assets such as gold.

Oil prices also remain a key concern for investors. Brent crude climbed to $100 per barrel for the first time since July, adding to inflation concerns and increasing market uncertainty.

The regional conflict has now entered its seventh month, with Iran warning that it is prepared for a more intense confrontation if the United States continues military actions targeting its territory and infrastructure.

PPI and CPI Data to Test Fed Rate Outlook

Market attention is now firmly focused on the U.S. Producer Price Index (PPI) due on Thursday and the Consumer Price Index (CPI) scheduled for Friday, both of which could influence the Federal Reserve’s policy decision next week. Interest-rate swaps currently imply roughly a 65% probability of a rate hike this month.

According to Tony Sycamore, Senior Market Analyst at IG, gold closed slightly higher overnight near $4,402, supported by a weaker U.S. dollar despite a sharp rise in Treasury yields.

Sycamore noted that gold remains well below its 200-day moving average near $4,537. A sustained move above that level would be needed to signal that the correction from the recent high of $4,697 has ended and that the broader uptrend is resuming.

Investor demand for gold also strengthened significantly. Global gold-backed ETFs attracted $18 billion in inflows during August, marking the second-largest monthly inflow on record, according to the World Gold Council. Total holdings increased by 121 tonnes to a record 4,189 tonnes, while assets under management surged 16% to $615 billion.

North American funds posted their third-largest monthly inflow on record, while European-listed funds recorded their strongest monthly inflow ever, highlighting robust investor interest in gold despite ongoing market volatility.

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Gold Eyes Inflation

Gold Rebounds from One-Week Low as Upside Appears Limited Ahead of U.S. Inflation Data

Gold (XAU/USD) rebounded from a one-week low near the $4,340 area reached during Wednesday’s Asian session and appears to have halted its three-day losing streak for now. A Japanese yen (JPY) rally triggered by the Bank of Japan (BoJ) has kept the U.S. dollar (USD) under pressure near its lowest level in more than two weeks, which in turn has supported gold prices.

However, expectations for a hawkish stance from major central banks could limit significant gains in the non-yielding precious metal, particularly ahead of key U.S. inflation data.

Gold found support around the $4,345–$4,340 area, which represents the confluence of the 200-period Simple Moving Average (SMA) on the four-hour chart and the 50.0% Fibonacci retracement of the July-August advance. This zone could serve as an important pivot point for the near-term gold price outlook.

Meanwhile, the daily Relative Strength Index (RSI) remains near the neutral 42 level, while the Moving Average Convergence Divergence (MACD) indicator is in negative territory. This suggests that the latest gold rebound may represent stabilization above trend support rather than the beginning of an aggressive bullish move.

Gold Price Faces Resistance Near $4,427

The current technical setup indicates that upside momentum remains fragile, with gold likely to encounter initial resistance at the 38.2% Fibonacci retracement near $4,427.

A sustained break above this level could expose the next major resistance at the 23.6% Fibonacci retracement near $4,529. A move above this area would strengthen the bullish technical outlook and potentially signal a broader recovery.

On the downside, initial support is aligned near the 200-period SMA at around $4,352.88, followed by the 50.0% Fibonacci retracement at $4,344.

A decisive break below this support zone could expose deeper Fibonacci support levels at $4,262 and subsequently $4,144. Therefore, traders are likely to closely monitor price action around the $4,340–$4,350 region for further directional signals.

Central Bank Policies Remain in Focus

Central bank expectations remain a key factor influencing gold prices. A 25-basis-point rate hike by the European Central Bank (ECB) on Thursday is widely considered fully priced in by markets.

In addition, traders have fully priced in a potential Bank of Japan rate hike at its September 17–18 policy meeting. The Reserve Bank of Australia (RBA) is also considering a possible rate increase this month.

Meanwhile, stronger-than-expected U.S. Nonfarm Payrolls (NFP) data has revived expectations for a Federal Reserve rate hike in September. Persistent inflation risks stemming from elevated energy prices could further strengthen the case for tighter monetary policy.

For gold, the combination of a weaker U.S. dollar and technical support provides some room for recovery. However, the prospect of tighter monetary policy and elevated inflation could continue to limit the precious metal’s upside.

With U.S. inflation data approaching, traders are likely to remain cautious. A softer-than-expected inflation reading could reinforce expectations for easier Fed policy and support gold prices, while hotter inflation could strengthen the dollar and Treasury yields, creating renewed downside pressure on XAU/USD.

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Gold Supported by Yen

 

Gold Prices Edge Higher as Yen Rally Weighs on Dollar, While Oil and Fed Expectations Limit Gains

Gold prices moved slightly higher on Tuesday as a sharp rally in the Japanese yen pressured the U.S. dollar and boosted demand for precious metals. However, persistent energy inflation risks and expectations of further Federal Reserve tightening continued to cap the metal’s upside potential.

Investors are also closely watching upcoming U.S. inflation data due later this week for fresh clues on the Federal Reserve’s next interest-rate decision.

As of 09:08 WIB, XAU/USD rose 0.5% to $4,430.40 per troy ounce, while Gold Futures were little changed at $4,475.61. Silver (XAG/USD) gained 0.9% to $66.79 per ounce, and platinum (XPT/USD) climbed 0.8% to $1,838.48. Meanwhile, the U.S. Dollar Index slipped 0.2% to 98.76.

Yen Surge Pressures Dollar, Supports Gold Prices

Gold recovered from losses recorded in the previous session as the Japanese yen extended its strong rally against the U.S. dollar.

The yen approached its strongest level of the year after continuing a surge that began last week. Traders increasingly expect the Bank of Japan to deliver another interest-rate hike, a move that has weighed heavily on the dollar and provided support for gold.

A weaker dollar makes dollar-denominated commodities more affordable for buyers using other currencies, helping to increase demand for precious metals despite ongoing macroeconomic challenges.

The latest rebound follows a sharp decline in gold prices last week. Since then, the precious metal has largely traded around the $4,400 level and remains within a relatively narrow range after rebounding from a July low near $4,000.

However, gains remain limited by inflation concerns linked to disruptions around the Strait of Hormuz. Oil prices climbed following renewed tensions between the United States and Iran, with Brent crude approaching the $100-per-barrel mark.

Fed Outlook and Inflation Data Remain Key Market Drivers

Markets continue to price in roughly a 60% probability that the Federal Reserve will raise interest rates next week, reflecting the impact of stronger-than-expected U.S. nonfarm payrolls data released last Friday.

Attention now turns to the upcoming U.S. Consumer Price Index (CPI) report, which could determine whether recent expectations for tighter monetary policy will remain intact.

Tony Sycamore, Senior Market Analyst at IG, noted that gold closed lower around $4,406 in the previous session, pressured by robust payroll data and rising energy prices.

According to Sycamore, this combination is likely to push U.S. Treasury yields higher when markets reopen, creating an additional headwind for non-yielding assets such as gold.

Meanwhile, continued buying from China’s central bank is helping to provide a floor for gold prices. The People’s Bank of China accelerated its gold purchases in August to the highest monthly level since 2023, underscoring sustained official-sector demand even as bullion prices remain near record highs.

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