XAUUSD Gold price moves closer to three-week peak amid modest USD downtick
Gold price regains positive traction amid a modest USD pullback from a multi-week high. Persistent trade-related uncertainties also lend support to the safe-haven precious metal. Reduced Fed rate cut bets might cap the commodity ahead of the critical US CPI repo
Fundamental Overview
Amid US President Donald Trump’s fresh tariff threats announced late Monday and his latest criticism of Federal Reserve Chairman Jerome Powell, Gold traders resorted to profit-taking after the bright metal hit a three-week high of $3,375 while bracing for the US inflation report for June.
Trump threatened to impose 100% tariffs on Russia if President Vladimir Putin does not agree to a deal to end his invasion of Ukraine in 50 days, per Bloomberg.
Meanwhile, the US President renewed his attacks on Powell, noting that “interest rates should be at 1% or lower, rather than the 4.25% to 4.50% range the Fed has kept the key rate at so far this year.”
Markets now price in 50 basis points of Fed interest rate cuts by year-end, with the first reduction foreseen in September.
However, it remains to be seen if these expectations hold ground following the US CPI data publication.
Economists are expecting the US annual CPI and core CPI to accelerate 2.7% and 3% in June, reflecting the tariff impact feeding through prices. Meanwhile, the monthly CPI and core CPI inflation figures are set to rise to 0.3% in the same period.
Hotter-than-expected US CPI monthly or annual readings could reinforce the Fed’s patient outlook, pushing back against expectations of two Fed rate cuts this year.
This scenario could help the US Dollar (USD) extend its recovery at the expense of the non-yielding Gold price.
Alternatively, if the data come in below forecasts, it could provide a fresh tailwind to the Gold price on renewed bets that the Fed will remain on track for two rate cuts.
BAY TP
TP 1 3,371
TP 2 3,391
TP 3 3,412
SELL PT
TP 1 3,337
TP 2 3,311
TP 3 3,286
