At 10:27 GMT, XAU/USD $ 2914.31, $ 1.38 or -0.05%falls.
CPI Report in Focus as Fed Rate Outlook remains uncertain
Traders keep closely in the CPI report, at 12.30 pm GMT, for instructions on inflation and the next step of the Federal Reserve. Markets expect a monthly increase of 0.3% in both the headline and the core CPI, which translates into an annual percentage of 2.9% and 3.2% respectively – both slightly lower than the numbers of January.
Although inflation is gradually relaxed, it remains above the target of 2% of the FED, which policy makers can hold when they meet next week. FED chairman Jerome Powell has suggested that tariff-controlled inflation can be temporary, but the worries are stuck that President Trump’s recent tariff increases can add the price pressure.
Trump’s rate policy contributes to uncertainty
Trump’s decision to increase rates on steel and aluminum import has injected further volatility into the financial markets. Some analysts claim that these trade measures can slow economic growth and at the same time keep inflation increasing, which complicates the rate-sliced timeline of the FED.
If inflation remains stubbornly high, the FED can postpone the cuts, which limits the upward potential of Gold. However, a softer CPI print could strengthen expectations for a rate reduction in June, which offers new support for gold.
Market forecast: Bullish if the inflation illuminates, bearish if Fed remains on hold
Gold’s short -term prospects depend on the inflation data of today. A softer than expected CPI report could weaken the US dollar and increase gold prices to $ 2,930.54 and possibly higher. However, if inflation surprises, the expectations of a long -term break can cause a withdrawal to the support zone of $ 2,854.26 – $ 2,843.43.