Gold trades in a narrow range, oscillating between modest gains and losses ahead of key US CPI release

Gold fell sharply by 1.65% on Monday as easing geopolitical tensions and renewed USD strength pressured safe-haven demand. Hopes for progress at Friday’s US–Russia summit on Ukraine, along with Trump’s three-month extension of the US–China trade truce and assurance that gold will not face tariffs, weighed further on prices.

Despite recent USD gains, weak US economic data and rising expectations for September and year-end Fed rate cuts lent some support to gold in Tuesday’s Asian session. Traders remain cautious ahead of key US inflation data, with PPI, retail sales, consumer sentiment, and multiple Fed speeches later this week likely to influence XAU/USD’s near-term direction.

XAU/USD TECHNICAL OVERVIEW

Technical Structure: Gold posted a strong bearish candle on the daily chart, closing just below the 20-SMA, signaling short-term weakness. However, on the 4-hour chart, prices are taking support from the 200-SMA, indicating potential downside cushioning. The 1-hour chart reveals a bullish flag formation, suggesting the possibility of an upside breakout if momentum returns.

Weekly Trend: Neutral

Intraday Trend/ Intraday Strategy: The intraday bias is bullish to neutral, favoring buy-on-breakout or buy-on-support strategies.

Major Support: 3330, 3314, 3300

Major Resistance: 3358, 3374, 3402