Gold prices (XAU/USD) steadies on Wednesday, following a strong rally of approximately 2.5% over the last three days. The precious metal is currently trading below the significant $2,700 level during early Asian trading hours. Investors are treading cautiously, avoiding major moves ahead of the US Consumer Price Index (CPI) report, scheduled for release at 13:30 GMT.
Impact of US Inflation on Gold Prices
The upcoming CPI data is expected to show persistent price pressures in the US. Headline inflation is anticipated to rise in November, signaling a sticky trend. While this increase may not deter the Federal Reserve (Fed) from a 25 basis points (bps) rate cut next week, it could restrict the pace of rate cuts planned for 2025. The Fed’s decision will be closely linked to inflation dynamics and economic stability.
For further updates on market movements and trading insights, visit Daily Gold Signal.
Geopolitical Tensions Boost Gold Prices Appeal
Geopolitical uncertainty continues to support safe-haven demand for gold prices. In the Middle East, tensions have escalated with Syrian rebels appointing a transitional prime minister. Meanwhile, Israel has intensified strikes on Syrian military facilities. Such developments are heightening market anxiety and driving investors toward gold as a secure asset.
Stay informed on geopolitical impacts and gold trends at Daily Gold Updates.
Market Analysis: US CPI Report and Global Economic Policies
Key Expectations:
- Headline CPI: Predicted to grow by 0.3% monthly and 2.7% annually, higher than October’s figures.
- Core CPI: Expected to maintain a steady 0.3% monthly increase and 3.3% annual growth.
The CME Group’s Fed Watch Tool suggests an 86% probability of a 25 bps rate cut during the December 17-18 Fed meeting, with projections for two to three additional cuts in 2025. Meanwhile, global central banks, including the Bank of Canada, Swiss National Bank, and European Central Bank, are set to announce their monetary policy decisions this week, reflecting varying economic strategies.
Technical Outlook: XAU/USD Consolidation Near $2,700
Gold has struggled to maintain momentum, weighed down by rising US Treasury yields and a strengthening US Dollar. Despite this, the overall trend remains positive. Immediate resistance is seen at $2,700, with further targets at $2,720 and $2,750.
Key Levels to Watch:
- Resistance: $2,700, $2,720, $2,750.
- Support: $2,675, $2,630, $2,610.
Conclusion: Anticipation and Strategy
As markets await clarity on US inflation and central bank policies, traders are positioning cautiously. For real-time updates and trading signals, explore Daily Gold Signal.
