Gold Inflation Focus

Gold Prices Edge Higher Ahead of Key U.S. Inflation Data

Gold prices held steady on Friday after suffering nearly a 2% decline in the previous session, as investors awaited the release of crucial U.S. inflation data that could influence the Federal Reserve’s next interest-rate decision.

At 4:38 p.m. WIB, spot gold rose 0.6% to $4,343.33 per ounce, while gold futures slipped 0.5% to $4,384.09 per ounce.

Despite the modest rebound, gold remained on track for its third consecutive weekly loss after falling 1.8% on Thursday. Spot gold recovered toward the $4,350 level, but the broader market continued to face pressure from expectations of tighter Federal Reserve monetary policy.

Tony Sycamore, Senior Market Analyst at IG, noted that gold remains well below its 200-day moving average near $4,537. He said the precious metal must reclaim that level to signal that the correction from its recent peak of $4,697 has ended. Until then, he sees the possibility of a deeper decline toward the $4,200 area.

Additional downside pressure emerged after Thursday’s economic data showed that costs for several components included in the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, accelerated more rapidly in August.

Oil prices have also become a major driver of inflation concerns. Although benchmark Brent crude futures eased on Friday, they remained on course to close above $100 per barrel for the first time in nearly four months as the conflict between the United States and Iran entered its seventh month with no clear signs of resolution.

Prolonged disruptions to global energy supplies could push prices even higher, increasing the likelihood that the Federal Reserve may raise interest rates further. Markets are currently pricing in around a 70% probability of a rate hike at next week’s Fed meeting, a scenario that is generally unfavorable for non-yielding assets such as gold.

Meanwhile, U.S. consumer prices are expected to have accelerated in August, largely reflecting higher gasoline costs linked to escalating tensions in the Middle East. Economists forecast that the Labor Department’s Consumer Price Index (CPI) rose 0.4% month-over-month in August, compared with a 0.1% increase in July. On an annual basis, inflation is expected to remain unchanged at 3.4%.

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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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