Gold climbs over 2% as traders await US CPI and Federal Reserve testimony

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Gold rises 2.18% today to $4088.47

Highlights

Gold remains volatile after falling below $4,000, as US-Iran tensions and Fed rate hike expectations drive sentiment shifts.
Institutional redemptions pressure gold ETFs while central banks continue net purchases, yet retail and speculative flows have weakened post-correction.
XAU/USD trades below major moving averages, momentum signals remain bearish, and the expected five-day range is $4,012 to $4,164 with high downside probability.

Volatility and outflows accelerate on Fed and geopolitical uncertainty

Gold has experienced significant volatility following its recent breakdown below the important $4,000 level as heightened US-Iran geopolitical tensions and expectations of further Fed rate hikes shape investor sentiment. Traders are closely watching upcoming United States Consumer Price Index (CPI) data and Federal Reserve Chair Kevin Warsh’s testimony, both poised to influence near-term policy direction. Institutional flows continue to leave gold ETFs as investors reallocate, though central banks remain net buyers. Retail and speculative interest has diminished after the latest correction.

Anton Kharitonov, expert at Traders Union, views gold’s latest advance as fragile. He points out that the metal remains well below its key moving averages, with all major technical indicators showing persistent selling pressure. ETF outflows and weak retail participation reveal shaky investor conviction, despite modest institutional support from central banks. The breakdown below $4,000 signals ongoing vulnerability, reinforced by a bearish alignment between short- and long-term trend indicators. "There is little to suggest gold can reverse its downtrend without a decisive shift in macro or technical conditions," Kharitonov concludes.

Viktoras Karapetjanc, expert at Traders Union, notes that gold’s recent volatility has opened new opportunities for nimble investors. He sees central bank accumulation and ongoing geopolitical tensions as supportive macro drivers. Karapetjanc maintains that gold’s bullish structure remains viable if price regains $4,093 and U.S. inflation data surprises to the upside. He highlights that the volatility amplitude and oversold readings offer attractive setups for a rebound. "I expect buyers to step in on dips, with further growth likely if momentum shifts," he says.

Bearish momentum reinforced as technical levels restrict upside

XAU/USD has slipped below the 20-day ($4,093), 50-day ($4,278), and 200-day ($4,633) moving averages, indicating pressure from sellers across all timeframes. Short-, medium-, and long-term trends are bearish, with $4,093 acting as near-term resistance and $4,013 as immediate support. The MA-50 vs MA-200 alignment confirms a bearish long-term backdrop. Momentum signals remain weak, as the MACD and ADX both signal selling pressure. RSI is at 36.34, CCI is negative, and Stochastic RSI signals the pair is in oversold territory. BBP is negative, confirming sellers dominate intraday momentum and forecasting an oversold setup. The Awesome Oscillator is negative, reinforcing the prevailing bearish tone. Gold is trading near the intraday high, with volatility amplitude at 2.12%. Intraday action shows strength toward session highs but momentum indicators suggest ongoing downside risk.

Earlier, analysts noted that gold was consolidating amid mixed signals, with supply risks and shifting momentum indicators keeping the outlook cautious. The current environment introduces heightened downside probabilities as bearish momentum persists, making a potential break below $4,013 a key risk to monitor in the days ahead.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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