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.