Gold Analysis: XAU/USD Struggles to Regain Momentum After CPI Data

As the trading week comes to an end, one of the most relevant developments has been the neutral behavior displayed by gold in the short term. Over the last four trading sessions, price action has registered only a modest move of around -0.36%, a dynamic that highlights the recent lack of momentum around the metal.

Part of this indecision remains in place because gold continues facing competition from alternative markets such as bonds, which have regained attractiveness in recent sessions. As long as uncertainty surrounding the possibility of more aggressive central banks remains present, gold demand may continue struggling to establish a stronger recovery, allowing a neutral environment to remain an important feature of XAU/USD price action in the sessions ahead.

What Comes Next Following the U.S. CPI Release?

Toward the end of the week, markets received the latest year-over-year CPI figures for the United States. Inflation came in at the expected 3.4% level for August, while Core CPI also matched expectations with a reading of 2.4%.

Although the data did not show a meaningful acceleration in inflation, it also failed to reveal a significant slowdown. This remains important because inflation continues to hold above the Federal Reserve's 2.0% target, highlighting that price pressures remain persistent and that the central bank's objective is still some distance away from being achieved on a consistent basis.

Source: TradingEconomics

What has become particularly interesting is the change in market expectations following the CPI release. Just a day earlier, there was roughly a 70% probability that the Federal Reserve would raise its benchmark rate to the 4.00% area. Following the inflation data, that probability climbed to nearly 86%.

At the same time, the probability of leaving rates unchanged declined to roughly 13.5%. This shift demonstrates that markets continue leaning increasingly toward the view of a more restrictive Federal Reserve, particularly because inflation continues to show resistance in returning toward the central bank's target.

The adjustment in these probabilities is important because it further reinforces expectations of a more aggressive monetary policy stance in the United States following the latest inflation data.

Source: CMEGROUP

With that in mind, the most relevant consequence for gold is the recent behavior of U.S. Treasury bonds. Following the economic data release, 10-year Treasury yields have continued moving higher and are once again approaching the 5.0% area, reaching fresh highs for 2026.

This situation suggests that fixed-income markets are reacting to the possibility of higher interest rates over the coming months and continue positioning themselves as one of the most attractive segments of the current market environment.

Source: TradingEconomics

This dynamic is not especially favorable for gold because bonds remain one of its main competitors among safe-haven assets. As Treasury yields continue rising, the relative appeal of an asset that offers interest income increases compared with gold, which does not generate yield.

For this reason, a sustained rise in yields may continue limiting part of the demand for the precious metal in the short term. As long as bonds retain their attractiveness, gold could continue facing difficulties in rebuilding momentum, leaving a phase of neutrality or even moderate selling pressure as a relevant feature of XAU/USD price action.

Gold Technical Outlook

Source: StoneX, Tradingview

• Potential Trendline Enters a Risk Zone: Although gold has attempted to maintain a medium-term bullish trendline that remains one of the most important technical structures on the chart, price action continues to display growing weakness near the base of this support area. If the current lack of direction persists, the bullish structure could continue losing strength and eventually open the door to a more evident neutral phase during the coming weeks.
   

• RSI: The RSI continues fluctuating near the 50 level, a reading that reflects balance between buying and selling momentum during recent sessions. As long as this behavior remains intact, neutrality could continue to be one of the most important features of the chart.
   

• MACD: A similar situation can be observed in the MACD, whose histogram remains close to the neutral 0 line. This behavior reflects balance within the average strength of short-term moving averages and supports the view that the current lack of direction remains an important part of the market's behavior.
   

Key Levels to Watch:

• $4,530 – Key Resistance: An important upside barrier that coincides with the 200-period Simple Moving Average and remains one of the most relevant technical references on the chart. Price action returning toward this area could restore the relevance of the bullish bias and strengthen the potential uptrend that has developed over recent weeks.
   
• $4,330 – Nearby Barrier: The main equilibrium area on the chart and a level that was respected multiple times during the previous week. As long as price continues developing around this area, a neutral environment could remain dominant and even begin to establish a more evident trading range over the coming weeks.
   
• $4,200 – Critical Support: A level that coincides with one of the most important support zones in the short term and is also located near the 50-period Simple Moving Average and the base of the potential bullish trendline. Price action approaching this area could not only confirm a break of the bullish structure observed in recent weeks but also create room for a more dominant bearish bias to emerge.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25