Gold Price Forecast: Will XAU/USD retake $2,400 on softer US CPI inflation?

• 
  Gold
  price
  extends
  its
  recovery
  momentum
  toward
  $2,400
  on
  US
  CPI
  day.
• 
  The
  US
  Dollar
  nurses
  losses
  with
  Treasury
  bond
  yields,
  as
  risk
  flows
  dominate
  on
  Fed
  rate
  cut
  bets.
• 
  Gold
  price
  keeps
  eyes
  on
  $2,400
  and
  US
  CPI
  inflation
  data
  amid
  bullish
  daily
  technical
  setup.

Gold
price
is
extending
its
upbeat
momentum
into
a
third
consecutive
day
on
Thursday,
eagerly
looking
forward
to
the
US
Consumer
Price
Index
(CPI)
data
release
later
in
the
day
to
seal
in
a
US

Federal
Reserve
(Fed)
interest
rate
cut
in
September.

All
eyes
remain
on
US
CPI
report

Following
a
brief
pause
in
the
Gold
price
recovery
following
round
one
of
Fed
Chair
Jerome
Powell’s
testimony
on
Tuesday,
buyers
regained
control
on
Wednesday
after
Powell’s
second
congressional
appearance.

Powell’s
caution
on
loosening
labor
market
conditions
suggested
a
September
rate
cut
is
likely
on
the
cards,
knocking
off
the
US
Dollar
(USD)
once
again
alongwith
the
US
Treasury
bond
yields.
Heightening
dovish
Fed
expectations
fuelled
a
risk-on
rally
on
Wall
Street,
which
exerted
additional
downside
pressure
on
the
safe-haven
Greenback.

Broad
US
Dollar
weakness,
Gold
price
made
another
run
toward
$2,400
but
failed
due
to
risk
appetite,
diminishing
the
demand
for
the
non-yielding
Gold
price.

On
Thursday,
risk
flows
extend
into
Asian
trading,
keeping
Gold
price
afloat
at
the
expense
of
the
US
Dollar.
Meanwhile,
the
modest
uptick
in
the
US
Treasury
bond
yields
seems
to
lack
conviction,
in
the
face
of
the
expected
slowdown
in
the
annual
US
CPI
inflation
data
for
June.

The
US
CPI
is
seen
rising
3.1%
YoY
in
June,
slowing
from
a
3.3%
increase
in
May
while
the
annual
core
CPI
inflation
is
likely
to
steady
at
3.4%
in
the
same
period.
On
a
monthly
basis,
CPI
is
set
to
rise
0.1%
while
core
CPI
is
seen
up
by
0.2%.

A
softer-than-expected
US
headline
annual

CPI
data
or
a
downside
surprise
in
the
monthly
inflation
figure
could
affirm
a
September
Fed
rate
cut
while
boosting
odds
for
another
rate
cut
in
December.
Conversely,
hot
inflation
data
could
push
back
against
Fed
rate
cuts
as
early
as
September.

In
the
former
case,
Gold
price
could
storm
through
the
roof
and
retest
all-time
highs,
as
the
US
Dollar
is
likely
to
melt
with
the
yields.
However,
hot
US
inflation
data
could
sink
Gold
price
toward
$2,300.

Markets
are
currently
pricing
in
a
74%
chance
that
the
Fed
will
lower
rates
in
September,
according
to
the
CME
Group’s
FedWatch
Tool.

Besides,
speeches
from
Fed
officials
and
US
President
Joe
Biden
could
also
have
some
bearing
on
the
USD-denominated
Gold
price.
Biden
could
express
his
take
on
the
June
inflation
data
and
the
timing
of
the
Fed
rate
cut.
Also,
markets
could
focus
on
his
comments
on
the
nomination
issue
amid
long-simmering
concerns
about
Biden’s
age
and
whether
he’s
fit
to
serve
a
second
term
as
a
US
President.

Gold
price
technical
analysis:
Daily
chart

The
short-term
technical

outlook
for
Gold
price
continues
to
lean
in
favor
of
buyers,
as
the
14-day
Relative
Strength
Index
(RSI)
points
north
above
the
50
level.

Gold
buyers
need
to
find
acceptance
above
the
six-week
high
of
$2,393
to
resume
the
uptrend
toward
the
all-time
high
of
$2,450.
Ahead
of
that,
the
$2,400
level
could
act
as
a
tough
nut
to
crack
for
them.

On
the
downside,
Gold
price
could
face
immediate
support
at
the
$2,350
psychological
barrier,
below
which
the
$2,340
demand
area
will
be
challenged.

Around
that
level,
the
50-day
Simple
Moving
Average
(SMA)
and
the
21-day
SMA
close
in.
A
sustained
move
below
the
latter
could
trigger
a
fresh
downtrend
toward
the
$2,300
round
level.