**Gold Prices and Technical Analysis** Gold prices fell as the US dollar strengthened, likely due to traders preparing for the upcoming US CPI report. This report could sway market expectations ahead of the Jackson Hole Symposium, where there might be discussions about rate cuts. If the CPI figures come in lower than expected, this could foster a dovish outlook. Such a scenario might increase the chances of a rate cut by the end of the year. On the other hand, higher-than-expected numbers could lead to a hawkish stance, which may impact gold prices and keep them within a certain range. Despite this, gold’s long-term trend remains upward, mainly due to anticipated declines in real yields as the Federal Reserve eases monetary policy. In daily technical analysis, gold is nearing the 3,438 resistance level but has seen a recent drop. Sellers might target short positions near this resistance, while buyers may look for opportunities around the 3,245 support level. The 4-hour chart shows activity around the 3,340 mark, where renewed buying interest could spark activity. Sellers, however, might wait for a drop towards 3,245 support. The 1-hour view suggests that numbers from the US CPI report will greatly influence movements. Key economic indicators to watch this week include US CPI, PPI, jobless claims, retail sales, and consumer sentiment. Gold is pulling back as the US dollar strengthens, suggesting cautious positioning before today’s inflation data. There isn’t a clear reason for yesterday’s decline, indicating that traders are simply reducing risk. The market is holding its breath for the US CPI report and the subsequent comments from the Federal Reserve. **The Main Event** Today’s major event, August 12th, is the release of the July Consumer Price Index. Economists predict a year-over-year increase of 2.9%, a slight drop from the 3.1% seen in June. This suggests inflation is slowly improving. The CPI data will significantly impact expectations for the Federal Reserve’s upcoming Jackson Hole meeting. If the CPI falls below the 2.9% target, we can expect a surge in bets for a September rate cut. This could lead traders to buy call options or long futures contracts in anticipation of a rally toward the 3,438 resistance level. A lower inflation figure would likely trigger a strong rally as the market starts to price in a more aggressive easing cycle for the remainder of 2025. Conversely, an inflation rate above 3.0% would lead the market to reconsider its rate cut expectations. This could strengthen the US dollar and put downward pressure on gold prices, increasing the likelihood of a drop to the 3,245 support level. Traders might respond by purchasing put options or shorting futures to benefit from this hawkish adjustment. Looking ahead, the Jackson Hole Symposium at the end of August is a crucial event, where Fed Chair Powell might indicate future policy directions. His hawkish statements at the 2022 symposium had a significant market impact, emphasizing the importance of this year’s event for setting future policies. Any hint of a dovish shift could drive a more sustained rally in gold. **Economic Data and Long-Term Trends** Recent economic indicators have also shown some signs of softening, supporting the case for potential rate cuts. Weekly jobless claims have hovered around 250,000 in recent weeks, up from the lows of 2024. This gradual cooling of the labor market provides the Fed with more justification to consider easing. In the grand scheme, gold is likely to maintain an upward trend as the Fed is expected to lower rates, which would decrease real yields. Short-term pullbacks, driven by stronger-than-anticipated data, are likely to present buying opportunities within the broader uptrend. For long-term holdings, buying near the 3,245 support level offers a favorable risk-to-reward setup. For more immediate trades following today’s CPI release, keep an eye on the 3,340 level. If buyers step in to support this zone, it could offer a quick chance for a trade back toward the 3,438 resistance. However, if gold decisively breaks below 3,340, it would indicate that sellers are in control, paving the way for a decline to the crucial support at 3,245. Create your live VT Markets account and start trading now.

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