Gold News: Inflation Heats Up, Labor Weakens—Uptrend Holds Ahead of Fed Decision

Gold Faces Pressure but Buy-the-Dip Strategy Holds Above Key Support

Gold prices edged lower Thursday as traders digested hotter-than-expected inflation data and a sharp rise in jobless claims, raising fresh uncertainty about the Federal Reserve’s next policy move.

Spot gold remains under pressure, with traders watching a resistance zone near $3674.70. On the downside, immediate support rests at $3593.22. A break below this level could trigger a steeper pullback toward the next key support zone at $3500.20–$3493.13.

Despite Thursday’s move lower, broader sentiment remains tilted toward buying dips. The 50-day moving average at $3395.20 continues to underpin the bullish bias. While a test of that trend-defining level looks unlikely for now, it remains a critical reference point should volatility pick up.

At 13:34 GMT, XAU/USD is trading $3623.93, down $16.66 or -0.46%.

CPI Jumps, Jobless Claims Surge—What’s Next for the Fed?

The August Consumer Price Index (CPI) rose 0.4% on the month—twice the prior month’s pace—while annual inflation held steady at 2.9%. Both figures landed slightly above expectations, reinforcing concerns that inflation remains sticky. Meanwhile, jobless claims surged by 27,000 to 263,000, topping the 235,000 estimate. The surprise uptick in unemployment applications suggests potential cracks in the labor market, complicating the Federal Reserve’s policy outlook ahead of its Sept. 16–17 meeting.

Treasury Yields Swing After Data Dump

Bond markets saw sharp intraday moves as traders reacted to the data. The U.S. 10-year Treasury yield briefly dropped to 4% before rebounding to 4.026%. The 2-year yield fell to 3.517%, down 1.6 basis points, reflecting market expectations of lower short-term rates. Fed funds futures now show a 94% probability of a 25 basis point cut next week, with a 6% chance of a 50 basis point move, according to CME’s FedWatch tool.

Gold Prices Forecast: Buy-the-Dip Still in Play, but Watch $3593

Gold’s pullback appears to be driven more by short-term technicals and knee-jerk reactions to economic data than any shift in fundamentals. As long as the metal holds above $3593.22, buyers may continue to step in. If that level fails, deeper losses toward $3500 are possible. Still, the prevailing strategy remains buy-the-dip, supported by a weakening labor market, sticky inflation, and growing expectations of easier Fed policy.

The broader gold prices forecast remains bullish, though near-term pressure may continue until clarity emerges from the Fed next week.

More Information in our Economic Calendar.