Gold prices staged a modest rebound during Asian trading hours, buoyed by dollar weakness and persistent safe-haven demand. Market attention remains laser-focused on the imminent release of US June CPI figures, with investors recalibrating expectations for potential Federal Reserve rate cuts this year. Consensus forecasts project headline CPI at 2.7% year-over-year, while core CPI may hit 3.0%. Disappointing data would amplify bets for September rate reductions, weakening the dollar while bolstering gold. Current market pricing reflects approximately 60% probability of September easing, with 50% odds favoring 50 basis points of cuts by year-end.
Despite President Trump's tempered trade rhetoric Monday, lingering anxiety over tariff negotiations continues to drive defensive capital toward gold. His recent tariff notifications to over 20 nations, coupled with a 50% levy on copper imports, have heightened global trade uncertainty, sustaining gold's appeal as a haven asset.
Technical Analysis: After hitting 3275 yesterday, gold underwent an anticipated pullback – precisely mirroring our projections. We previously highlighted resistance at 3375-80 and executed shorts at 3370-72 that profitably closed at 3341. The daily chart registered its first bearish candle following three consecutive bullish sessions, signaling corrective momentum. Our morning long entry at 3344 anticipates a bullish reversal today, targeting 3400 upon breaching 3375 resistance.
The ascending moving averages configuration underpins bullish potential, though this upward thrust must materialize today or risk exhaustion. Critical support now holds at 3340-45 – any breakdown here could trigger slides toward 3325 and 3300 thresholds. Current near-term support hovers at 3353-56. Trading strategy prioritizes dip-buying opportunities, with European session dynamics dictating US trading direction: European upside breakouts would extend gains stateside, while consolidation would precede sideways movement. Tonight's CPI release remains the decisive market catalyst.