Gold Rebounds Ahead of US CPI, Markets Weigh the Fed Path

Gold has regained its footing after yesterday?s slide, with traders focused on the coming inflation print. The big question: will this afternoon?s US CPI data give the Federal Reserve fresh directional guidance, or will it reinforce the current footing? The answer will hinge on what the numbers imply for the Fed?s policy path.

• Gold is trading today in a firmer range of $4,950 to $4,980 per troy ounce
• Yesterday, the price briefly fell by more than 3%
• The market is awaiting the US CPI release at 14:30 CET

The retreat was driven by a combination of solid US economic signals and broader market stress. January?s surprisingly strong job data cooled expectations of rapid rate cuts. In the futures market, gauges of the first rate move shifted, with traders re-pricing the timing from June to July, according to Trading Economics and the FedWatch tool.

For gold, this translates into a classic headwind: higher interest rates raise the opportunity cost of holding non-yielding assets. The move was amplified by liquidity concerns, as some investors sold metal to shore up margins in other asset classes amid a weaker overall market.

The 14:30 trigger: what the CPI might mean

Today?s pivotal event is the US consumer price index. The release could shed light on whether the disinflation trend in the United States remains intact.

• If CPI is lower than expected: arguments for earlier rate cuts would gain traction, potentially supporting gold.
• If CPI prints higher than expected: the ?higher for longer? stance would be reinforced, adding downside pressure.

In short, the next directional nudge is likely to come from policy considerations rather than chart patterns.

Should investors sell immediately? Or is it worth buying Gold?

Additional sources of support: geopolitics and demand

Despite the near-term volatility, several stabilizing factors remain cited. Wells Fargo reportedly advised clients to use the weakness for purchases, adopting a ?buy the dip? stance.

Geopolitical tensions continue to drive demand for bullion as a hedge, notably remarks by US President Donald Trump regarding Iran that contributed to market uncertainty. A further underpinning is ongoing central bank purchases aimed at reserve diversification, which, according to the report, helps keep the price above $4,900.

Looking ahead, attention will shift to the US market open and how the dollar responds to the CPI figures, a dynamic likely to set the near-term tempo for gold.

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