just now
- Gold (XAU/USD) trades cautiously ahead of tonight’s CPI release, with markets bracing for potential volatility and trend confirmation.
- Price continues to respect the bullish FVG and New Week Opening Gap as a launchpad for potential expansion.
- A soft CPI may ignite a breakout toward $3,434, while sticky inflation risks a breakdown toward $3,271
CPI Comin’ In Hot
- Headline CPI YoY (May) expected at 2.5%, up from 2.3%
- Core CPI YoY projected at 2.9%, slightly above April’s 2.8%
- The Fed’s preferred inflation gauge remains elevated - keeping rate cut hopes in check
The dollar index (DXY) has struggled to find clear direction, oscillating between breakout and breakdown levels, depending on inflation expectations. This places even more importance on this CPI print as a volatility trigger that could tilt the dollar—and thus gold—into a new directional phase.
Gold Gearing for the Next Leg: Up or Down?
Gold has stabilised after last week’s volatility and is on a “stabilised” or “calm” price action at the beginning of this week, but that calm may be short-lived or may be not. Markets are now bracing for the next macro catalyst later on today.
Gold has been supported by central bank demand, global geopolitical tensions, and expectations of a peak Fed rate, but today’s CPI print could challenge or strengthen that view. If inflation proves stickier than expected, it could reinforce the Fed’s cautious stance and support the U.S. dollar, pressuring gold. If CPI surprises to the downside, it could ignite bullish momentum on gold, especially with a weak dollar narrative building.
Gold Respecting $3,320-$3,340 Level
Gold is currently consolidating in a tight range, as shown in the chart below:
Previously, I have mentioned in Gold outlook: Why macro bulls are still in control that overall, bullish scenario is still intact since we haven’t tested yet the $3,271.18 level.
After consolidating for quite some time since Monday and testing out the New Week Opening Gap created last week, we are now gearing up towards the $3,350 level unless other scenarios play out post-CPI.
Key Levels to Watch & CPI Price Action Scenarios
Bullish Scenario: Soft CPI Surprise
If CPI comes in below expectations:
- Dollar weakens, Fed rate cut bets increase
- Gold clears $3,350 resistance
- $3,320-$3,340 FVG level holds
This FVG level can be a low-risk area for potential long setups if price confirms with CPI volatility. However, a deeper sweep of the $3,300–$3,280 liquidity pocket is also possible before expansion.
Bearish Scenario: Sticky Inflation
If CPI surprises to the upside:
- Dollar strengthens sharply
- Gold breaks below New Week Opening Gap, targets $3,295.79–$3,298.03
- Break of $3,320-$3,340 FVG level
- Test of $3,271.18
How to Start Trading Gold:
How to Swing Trade Gold (XAU/USD) Using Smart Money Concepts: A Simple Guide for Traders
Complete Step-by-Step Guide to Day Trading Gold (XAU/USD) with Smart Money Concepts (SMC)
The Ultimate Guide to Backtesting and Trading Gold (XAU/USD) Using Smart Money Concepts (SMC)
Why Gold Remains the Ultimate Security in a Shifting World
This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.
