Gold US CPI focus kept prices rangebound after an early post-FOMC rise faded, with traders also watching developments in the Middle East.
Gold had strengthened after the FOMC decision, even though three dissenters backed a rate hike. The article said markets had expected support for a hike from Logan and Hammack. However, Kashkari also joined that camp.
The source said some hedges may have been unwound after the decision. It added that about a 30% chance of a rate hike had been priced in before the release. As a result, gold later gave back all of its post-decision gains.
Gold US CPI in Focus
Fed Chair Warsh gave no signal on the next meeting, according to the source. Therefore, traders now see the US CPI report on August 12 as the next key event. The article said that data will likely decide whether the Fed hikes in September.
On the geopolitical side, the source said the Middle East situation has barely changed. Although Trump’s rhetoric appeared to soften somewhat, the article said inflation risks remain tilted upward until there is clear de-escalation.
Yesterday, gold got support from heavy selling in the US dollar. The source said Japan and South Korea intervened in the FX market, and it described moves in USD/JPY as massive. Meanwhile, those flows spread into other markets, and month-end trading added to volatility.
Technical Levels Keep Traders Waiting
The source said the broader backdrop remains much the same as before the FOMC meeting. Therefore, the market is waiting for gold US CPI risk and for US-Iran developments.
On the daily chart, the article said gold is moving above a downward trendline. It added that buyers may step in near current levels, with the next trendline around 4,400. However, sellers would want a move back below the trendline, with 3,885 as the next downside level.
On the 4-hour chart, the source described price action as rangebound since late June. It said buyers need a break above 4,200 to build conviction, while sellers may step in near that resistance and target 3,885.
On the 1-hour chart, the article pointed to minor resistance near 4,120, where price has been rejected several times in recent weeks. It added that buyers would look for a break higher toward 4,200, while sellers may use that zone to keep aiming for new lows. Today, traders will also watch the US Q2 Employment Cost Index.
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Source: InvestingLive
