Gold (XAU/USD) rebounded above $4,400 during the early Asian session on Thursday, snapping a three-day losing streak amid a weaker US Dollar and renewed geopolitical tensions in the Middle East [1]. The precious metal's recovery comes as traders anticipate key US inflation data, with the Producer Price Index (PPI) due on Thursday and the Consumer Price Index (CPI) on Friday, both of which could influence the Federal Reserve's next interest rate decision [1].
According to Reuters, Iran claimed responsibility for attacking 10 ships near the Strait of Hormuz after the US reportedly sank five Iranian oil tankers, marking the largest escalation in shipping attacks since the onset of the six-month-old war [1]. These developments, along with rising oil prices, have heightened inflation concerns and increased the likelihood of a Federal Reserve rate hike at its upcoming policy meeting. The CME FedWatch Tool indicates that the market is pricing in about a 60% chance of a rate hike next week [1].
TD Securities noted that a stronger US jobs report initially pressured gold prices, but subsequent less hawkish commentary from Federal Reserve officials and currency interventions helped stabilize the market [1]. The bank emphasized that gold remains highly sensitive to incoming data and headlines, with inflation data seen as the next major catalyst. TD Securities warned that an upside surprise in inflation could reinforce expectations for Fed tightening and weigh on gold, while softer inflation data could attract discretionary buyers back into the market [1].
From a technical perspective, gold remains bullish above the 100-day moving average, with initial resistance at the Bollinger middle band around $4,465 and further resistance near $4,675. On the downside, support is seen at the 100-day MA at $4,345 and the Bollinger lower band at $4,255 [1]. The Relative Strength Index (RSI) at 50.65 suggests neutral momentum after recent gains [1].
CONCLUSION
Gold's rebound above $4,400 reflects heightened market sensitivity to US inflation data and geopolitical risks in the Middle East. With a 60% probability of a Fed rate hike priced in, upcoming PPI and CPI reports are expected to be pivotal for gold's near-term direction. Technical indicators suggest a constructive bias, but the market remains data-driven and volatile.