Gold holds steady post-CPI with Fed cut bets intact

• Gold edges lower toward $3,620 as traders turn cautious ahead of the US CPI data release.
• Soft US PPI and weak labor market data keep Fed rate cut bets alive, cushioning Gold’s downside.
• XAU/USD is consolidating above short-term support at $3,620 after slipping below the 21-SMA on the 4-hour chart.

Gold (XAU/USD) remains under pressure on Thursday, failing to capitalise on a softer US Dollar (USD) and weaker Treasury yields following the release of US inflation data. At the time of writing, the yellow metal is trading around $3,630, struggling to attract fresh buying interest after hitting an all-time high near $3,675 earlier this week.

The US Consumer Price Index (CPI) rose 0.4% MoM in August, beating the forecast of 0.3% and accelerating from 0.2% in July. On an annual basis, headline CPI held steady at 2.9%, in line with expectations but marking a notable uptick from 2.7% previously.

However, the Core CPI, which strips out food and energy prices and is more closely watched by the Fed, rose 0.3% MoM and 3.1% YoY, matching both forecasts and July’s readings.

Adding to the cautious mood, recent soft US data including weaker Producer Price Index (PPI) figures, disappointing Nonfarm Payrolls, a higher Unemployment Rate, and downward revisions in prior job growth have reinforced the case for policy easing. Following the CPI release, markets remain convinced the Federal Reserve will cut rates by 25 basis points next week, with traders also pricing in the prospect of up to three reductions by year-end. This backdrop continues to limit the downside for Gold, even as the metal consolidates below its record highs.

Market movers: Gold outlook brightens as Fed uncertainty grows

• The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, fell sharply on Thursday, snapping a two-day winning streak. At the time of writing, the index is hovering near 97.60.
• US Treasury yields drop sharply across the curve as dovish expectations build. The 10-year yield briefly dipped below 4% and is holding near 4.015%, the 30-year sits around 4.666%, while the rate-sensitive 2-year has fallen to 3.508%. Softer data and firm Fed rate-cut bets continue to pressure yields lower.
• The US PPI for August delivered a significant downside surprise with headline prices contracting at a 0.1% pace MoM against a forecast of 0.3%, while the annual rate eased to 2.6% compared to 3.3% expected. Core PPI also slipped 0.1% on the month, missing the 0.3% forecast, bringing the yearly rate down to 2.8% from an expected 3.5%.
• On Wednesday, the US Senate Banking Committee advanced Stephen Miran’s nomination to the Federal Reserve Board in a 13-11 vote, sending it to the full Senate ahead of next week’s FOMC meeting. Miran, who also serves on the White House Council of Economic Advisers, is viewed as supportive of quicker rate cuts. However, his dual role has sparked concerns over the Fed’s political independence.
• The Trump administration said on Wednesday it will appeal a federal judge’s ruling that temporarily blocked US President Donald Trump from firing Fed Governor Lisa Cook. The case stems from allegations predating her confirmation, which the court ruled did not meet the “for cause” standard required under the Federal Reserve Act.
• Major global banks have turned increasingly bullish on Gold. JP Morgan sees prices averaging $3,675 in Q4 and reaching $4,000 by mid-2026, while Goldman Sachs projects a move beyond $3,700 this year with upside risks toward $4,000. Australia and New Zealand Banking Group (ANZ) recently lifted its 2025 forecast to $3,800.
• US Initial Jobless Claims rose more than expected, climbing to 263K in the latest week compared with forecasts of 235K and a prior 236K (revised from 237K). The data points to further softening in the labor market, reinforcing expectations that the Fed will press ahead with policy easing.

Technical analysis: XAU/USD steadies near $3,620 with US CPI in focus

Gold (XAU/USD) is testing short-term support at $3,620 on the four-hour chart after slipping below the 21-period Simple Moving Average (SMA). The yellow metal printed a record high near $3,675 on Tuesday but has lost momentum since then, with Wednesday’s attempt to reclaim $3,650 falling short. This leaves immediate resistance at the 21-SMA around $3,634, while the $3,620 area is shaping up as the first line of defense.

A decisive break lower would bring the psychological $3,600 mark into play, followed by stronger support near $3,575, converging with the 50-SMA. On the upside, a recovery above $3,634 would allow bulls to challenge $3,650. A break of that level could pave the way for a retest of the all-time high near $3,675.

A sustained break above that record peak would signal renewed bullish momentum, paving the way toward $3,700 and beyond into uncharted territory. The Relative Strength Index (RSI) is holding around 53, suggesting consolidation may persist in the near term.