Gold News: XAUUSD Price Slips Early Monday as Fed Hike Odds Hit 87%

Gold Finished Higher Friday Despite Hot CPI and Rising Rate-Hike Odds

Early Monday at 03:10 GMT, Spot Gold (XAUUSD) is trading at $4,336.10, down $13.32 or 0.31%. The session high is $4,355.41 and the low is $4,326.35.

Spot gold rebounded Friday after testing its lowest level since September 2. Core CPI came in above expectations with Treasury yields at multiyear highs and rate-hike odds climbing to 87%. Sellers had the inflation report, the yields and the rate-hike case working for them. Gold still finished higher on the session.

Thursday’s nearly 2% drop had pushed the market into the support zone at $4,319.60 to $4,230.51. Friday’s low at $4,292.11 held inside that area. Buyers defended it and pushed the recovery past $4,396.78 before settling at $4,349.42.

On Friday, Spot Gold (XAUUSD) settled at $4,349.42, up $32.40 or 0.75%.

August CPI Was Hot on Core

August Consumer Price Index rose 0.4% from July after increasing 0.1% in July. The annual inflation rate held at 3.4%. Both headline figures matched estimates. Inflation remained well above the Fed’s 2% target.

Core CPI increased 0.3% for the month, topping the 0.2% forecast. The annual core rate eased to 2.4% from 2.5%, matching expectations.

Thursday’s Producer Price Index had already set the tone. Headline PPI rose 0.4% in August, matching estimates. Core wholesale prices came in at 0.2%, below the 0.3% forecast. Gold dropped nearly 2% after Thursday’s report. Friday’s hotter core CPI did not produce another round of selling.

The federal funds target range is at 3.50% to 3.75%. A quarter-point increase next Wednesday would lift it to 3.75% to 4.00%. The market moved from 67% before this week’s inflation data to 87% after.

Yields, Oil and the Dollar All Moved Friday and Gold Survived

The 2-year Treasury yield rose 7.8 basis points to 4.628%, its highest since July 2024. The 10-year gained 2.9 basis points to 4.97% after touching 4.992%, its highest since October 2023. The 30-year held near 5.356%. Gold finished higher with all three at multiyear levels.

WTI settled at $100.05, down 2.4%. Brent finished at $104.61, down 2.8%. Brent still posted a weekly gain of more than 9%. Iranian state media said Iran plans to meet Gulf states in Oman on Monday to discuss the Strait of Hormuz. Thursday gold sold off on the crude surge. Friday gold rallied on the pullback.

The Dollar Index slipped 0.04% to 99.04 after rising on the initial CPI release. The index was headed for its second consecutive weekly decline. Gold recovered from Friday’s low as the dollar was fading.

Daily Spot Gold (XAUUSD) Technical Analysis

Spot gold edged higher on Friday after rebounding from a test of its lowest level since September 2. The main trend is down according to the main swing chart. A trade through $4,282.62 will signal a resumption of the downtrend. A move through $4,510.93 will change the main trend to up.

The market is currently trading well below 200-day moving average resistance at $4,538.39, however, close to 50-day moving average support at $4,269.07.

The three-month range is $3,942.10 to $4,697.11. Its retracement zone is $4,319.60 to $4,230.51. On Friday, the market tested this zone with a low at $4,292.11.

The intermediate range is $4,697.11 to $4,282.62. Its retracement zone at $4,489.87 to $4,538.77 stopped a rally at $4,510.93 on September 3.

The minor range is $4,282.62 to $4,510.93. Its midpoint is $4,396.78. On Friday, the move into the retracement zone at $4,319.60 to $4,230.51 triggered an intraday rally to $4,402.63, which was slightly higher than the minor-range midpoint at $4,396.78.

What to Watch

The Fed decision next Wednesday is the next major test. The hike is nearly fully priced at 87%. Gold traders are listening for whether Chair Kevin Warsh frames this as a standalone adjustment or signals additional increases.

The Iran-Gulf states meeting in Oman on Monday is the next crude headline. WTI finished above $100 and Brent above $104 heading into the weekend, with Brent gaining more than 9% for the week.

The bias leans bearish with the main trend down on the swing chart. The support zone at $4,319.60 to $4,230.51 held Friday’s selling at $4,292.11 with the 50-day moving average at $4,269.07 sitting inside the zone. A decisive break below the 50-day and the 61.8% at $4,230.51 restarts long liquidation and opens the downside.

The minor midpoint at $4,396.78 is the first level to recover on the upside. Friday’s recovery pushed through it to $4,402.63. Holding above $4,396.78 strengthens the base. Overcoming that level puts $4,489.87 to $4,538.77 and the 200-day at $4,538.39 back in play where the main trend can change on a push through $4,510.93.

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