Gold prices are treading water near $3,330 on Tuesday as investors balance optimism over US–China trade talks with caution ahead of critical US inflation data and rising geopolitical tensions.
Trade Optimism Offsets Geopolitical Risks
Renewed trade dialogue between senior US and Chinese officials in London has lifted market sentiment, helping stabilize the US Dollar. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are leading the discussions, with officials signaling progress on issues such as rare earth exports and export controls.
Meanwhile, geopolitical concerns are lending support to gold. Rising tensions surrounding Iran’s nuclear program — including accusations by Iranian lawmakers and threats from former US President Donald Trump — have reintroduced safe-haven demand for the precious metal.
CPI Data in Focus Ahead of Fed Decision
Traders are now turning their attention to Wednesday’s US Consumer Price Index (CPI) report, which could shape expectations around the Federal Reserve’s next policy move. Markets are pricing in a 54.7% probability of a 25-basis-point rate cut in September, according to the CME FedWatch Tool.
Forecasts show headline CPI rising 0.3% month-over-month in May (up from 0.2% in April), with the annual rate reaching 2.5%. Core CPI is also expected to climb to 2.9% year-over-year. A hotter-than-expected report could dampen hopes of near-term rate cuts, pressuring gold. Conversely, a weaker reading may support bullion prices by reinforcing dovish policy expectations.
Gold Technical Outlook: Key Levels in Play
Gold (XAU/USD) is holding firm above the $3,300 support level, currently trading around $3,330. Immediate resistance lies at $3,350, followed by $3,375 and the recent high near $3,392. A sustained breakout could pave the way toward $3,500 — the all-time high reached in April.
On the downside, the 20-day Simple Moving Average (SMA) at $3,303 provides initial support, with stronger technical levels at $3,291 (23.6% Fibonacci retracement), $3,270 (50-day SMA), and $3,240 (symmetrical triangle support).
Momentum indicators such as the daily RSI, currently near 52, suggest a market in consolidation, awaiting a clear directional catalyst — likely in the form of Wednesday’s inflation print.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Qilu Bank Enhances Support for Small Businesses with Innovative Financial Tools
- Bitcoin Poised for a Surge Amid Gold’s Delivery Delays, Expert Claims
