Gold Recovers Losses as Traders Await US CPI Data Ahead of Fed Rate Decisions

Market Overview

Gold erased Wednesday's losses, retreating from a downtrend triggered by former President Trump's initial remarks on the Iran Memorandum of Understanding. Markets reversed course after Trump clarified negotiations would continue, reducing geopolitical risk premiums. The metal now trades in a consolidative range ahead of Tuesday's US Consumer Price Index (CPI) report, a key driver for Federal Reserve rate expectations.

Technical Analysis

On the daily chart, gold remains below a critical downward trendline. A break above this level could signal bullish momentum toward the $4,500 psychological resistance. Sellers are likely to defend the trendline, with stops placed above to target fresh lows. The 4-hour timeframe shows a minor pullback trendline, where sellers maintain pressure unless buyers force a breakout. The 1-hour chart highlights a key support zone near $4,090, which has historically capped downside moves. A breach below this level would open the door for further bearish extension.

Implications for Traders

Tuesday's US CPI data will be pivotal for gold's trajectory. A stronger-than-expected reading could spur a hawkish repricing of Fed policy, pressuring non-yielding assets like gold. Conversely, softer inflation figures may reinforce the peak inflation narrative, supporting a relief rally. Traders should monitor real yields and the US dollar index (DXY) for confirmation of broader risk sentiment shifts.

Risk Considerations

While geopolitical tensions have eased, unexpected escalations could reintroduce volatility. The Fed's emphasis on inflation underscores the importance of CPI outcomes. Technical levels outlined above provide actionable reference points, though sudden news flow may override chart-based strategies. Always align trades with risk tolerance and market context.