Gold price sticks to intraday gains; modest USD strength might cap the upside ahead of US CPI

• Gold price regains positive traction following the previous day’s range-bound price moves.
• Trade-related uncertainties and geopolitical risks underpin the safe-haven precious metal.
• A modest USD strength might cap the XAU/USD ahead of the critical US inflation figures.

Gold price (XAU/USD) sticks to its modest intraday gains around the $3,340 area through the latter part of the Asian session on Wednesday, though it remains below the overnight swing high. Traders now seem reluctant and opt to wait for the release of the US consumer inflation figures before placing fresh directional bets. The crucial data will influence the Federal Reserve’s (Fed) rate-cut path, which will drive the US Dollar (USD) and provide a fresh impetus to the non-yielding yellow metal.

Heading into the key data, a federal appeals court’s ruling that US President Donald Trump’s sweeping tariffs can temporarily stay in effect adds to the trade uncertainty. This, along with persistent geopolitical risks, should continue to act as a tailwind for the safe-haven Gold price. Moreover, bets that the Fed will lower borrowing costs further in 2025 might hold back the USD bulls from placing aggressive bets and suggest that the path of least resistance for the XAU/USD pair is to the upside.

Daily Digest Market Movers: Gold price draw support from the latest tariffs turn

• US President Donald Trump received a favorable update on Tuesday as a federal appeals court ruled that his “Liberation Day” tariffs can temporarily stay in effect. Last month, the US Court of International Trade blocked the implementation of Trump’s tariffs, saying that the method used to enact them was unlawful.
• The latest development comes as the US and China, following two days of talks in London, agreed on a framework to implement the Geneva Consensus and ease trade tensions. US Commerce Secretary Howard Lutnick indicated the deal should resolve issues between the two countries surrounding rare earths and magnets.
• Russia continues with its strikes on Ukraine’s northeastern city of Kharkiv after rejecting an unconditional ceasefire earlier this month. Moreover, Israel continues to bombard the Gaza Strip relentlessly, keeping geopolitical risks in play and driving safe-haven flows toward the Gold price on Wednesday.
• The stronger-than-expected US Nonfarm Payrolls report released last Friday pointed to a still resilient labor market, forcing investors to scale back their bets for an imminent interest rate cut by the Federal Reserve. Markets, however, are still pricing in the possibility of two rate reductions by the end of this year.
• The US Dollar, however, remains confined to a familiar range, just above its lowest level since April 22, which it touched last week, as investors await more cues about the Fed’s rate-cut path. Hence, the focus remains glued to the release of the US Consumer Price Index (CPI) report later during the North American session.
• This will be followed by the US Producer Price Index (PPI) on Thursday, which will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the commodity. In the meantime, the supportive fundamental backdrop should act as a tailwind for the XAU/USD.

Gold price needs to surpass $3,352-3,353 hurdle to back the case for further gains

From a technical perspective, the overnight bounce from the vicinity of the 200-period Simple Moving Average (SMA) on the 4-hour chart and the subsequent move up favor the XAU/USD bulls. Adding to this, oscillators on the said chart have again started gaining positive traction and back the case for further intraday move-up. A further strength beyond the $3,352-3,353 immediate hurdle will reaffirm the bullish outlook and lift the Gold price towards the $3,377-3,378 intermediate hurdle en route to the $3,400 round figure.

On the flip side, weakness back below the $3,323-3,322 area might continue to attract some buyers and find decent support near the $3,300 round figure. Some follow-through selling, leading to a subsequent fall below the $3,288-3,287 zone (200-period SMA on the 4-hour chart), might shift the bias in favor of bearish traders and drag the Gold price to the monthly swing low, around the $3,245 region. The XAU/USD could extend the corrective decline further and eventually drop to the $3,200 neighborhood.