Hot US inflation data, Fed policy: Gold plunges 4.24%

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Gold slides 4.24% to $4,636.50 today

Highlights

US February PPI rose 3.4% year-over-year, exceeding forecasts and signaling persistent producer inflation pressures.
Federal Reserve held rates steady at 3.5%–3.75% and now projects just one rate cut in 2026, fueling further market volatility.
Gold trades well below short- and medium-term resistance levels amid strong bearish momentum and is likely to consolidate between $4,500 and $4,900 over the next week.

Surprise PPI gains and Fed outlook drive broad market selloff

On March 13, 2024, the US Producer Price Index (PPI) increased 3.4% year-over-year for February, surpassing market expectations and the prior annual figure of 2.9%. The core PPI rose to 3.9%, and the monthly PPI advanced by 0.7%, also higher than anticipated. Following the Federal Reserve's decision to maintain rates at 3.5% – 3.75% and issue a revised outlook for only one rate cut in 2026, these data points were accompanied by broad selling pressure.

Bearish momentum extends as XAU hovers below resistance levels

Technical conditions show persistent bearish momentum: XAU is positioned below both the SMA-20 and SMA-50, but still trades above the SMA-200. Immediate resistance is defined by the Ichimoku Kijun at $5,113.23. Indicators on the daily chart — including a MACD indicating selling, a weak ADX (18.81), oversold RSI (32.83), Stoch RSI (0.00), CCI (−188.64), and BBP (−117.48), as well as a bearish Awesome Oscillator — reinforce this outlook. Intraday price action has been pressured, with a gap down at the open, high volatility, and prices holding near the session’s low of $4,671.34.

Limited upside probability as volatility and oversold signals collide

Over the next five trading days, XAU is expected to fluctuate within a volatility band of $4,500 to $4,900. The probability of significant upside remains low (less than 20%), while further declines are more likely. The baseline scenario foresees price consolidation within this range as selling pressure competes with oversold technical signals. A clear break above $4,900 could shift momentum toward higher resistance targets, while a move below $4,500 would likely lead to deeper retracement toward longer-term support, with potential for short-lived rebounds from oversold levels.

Anton Kharitonov, expert at Traders Union, sees strong selling pressure dominating gold’s technical landscape. He notes that indicators point to continued downside risk, with any potential for a short-term rebound limited by weak sentiment and bearish momentum. Kharitonov remains cautious as recent macro data and policy signals have amplified volatility. "My tactical bias stays defensive — unless XAU can reclaim $4,900, further declines remain the base case."

Earlier, analysts noted that despite ongoing short- and medium-term weakness, gold's long-term outlook remained supported by safe-haven demand and central bank accumulation amid heightened geopolitical and economic risks. The current article reinforces this perspective as persistent selling and oversold technical conditions dominate, making it crucial for traders to monitor a potential shift in momentum should gold break above $4,900 in the coming sessions.

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.