Gold prices rebounded sharply Friday, recovering above the key 100-day moving average at $4,335 after initially dropping below $4,300 following the latest US inflation data release. The Consumer Price Index figures have intensified market expectations that the Federal Reserve will proceed with an interest rate hike at next week’s policy meeting, creating unusual volatility in precious metals trading.
Despite inflation data typically pressuring gold, the metal found support as traders repositioned ahead of the anticipated Fed decision. The recovery suggests underlying bullish momentum remains intact, with the 100-day SMA proving critical technical support. US Treasury yields initially spiked on the CPI release but subsequently eased, providing gold bulls the breathing room needed to stage this comeback.
Traders and brokers should monitor gold’s ability to hold above $4,335 through the weekend, as this level will likely determine near-term direction heading into the Fed meeting. The interplay between rate hike certainty and safe-haven demand continues driving price action.
FXnCO Insight
Watch the $4,335 level closely as your key risk parameter for gold positions ahead of next week’s Federal Reserve decision.
Source: FXStreet