FX.co ★ AB2 | XAU/USD, GOLD

XAU/USD In anticipation of the US inflation test, gold is returning to the $4,400 mark early on Wednesday. Amid the US-Iran standoff, rising oil prices, and dwindling September Fed rate rise bets, the US dollar remains inside a range. Amidst positive RSI, gold's daily chart indicates a test of the 200-day SMA near $4,500. After finding buyers at $4,350, gold is back on the bids and aims to reclaim the $4,400 barrier in Wednesday's Asian trading. All eyes are still on the crucial US Consumer Price Index (CPI) data, which could decide whether gold rises or severely corrects. The impasse between the United States (US) and Iran over negotiations to reopen the Strait of Hormuz and the US's and Yemen's Iran-aligned Houthis' separate attacks on shipping continue to keep oil prices and inflation concerns high, and nothing seems to have changed in the fundamental backdrop. Despite the dismal Nonfarm Payrolls report for July, which helped markets lower expectations for a US Federal Reserve (Fed) interest rate hike in September, gold bulls continue to hold out hope for another benign inflation report from the US. According to the CME Group's FedWatch Tool, the likelihood of a September Fed rate hike is currently at a coin-toss level. As a result, attention is once again focused on the US CPI data release, especially the core inflation readings, which are protected from the war-related energy swings. After increasing by 2.6% in June, the annual core CPI is expected to rise by 2.5% in July. After a flat reading in June, core CPI inflation is predicted to increase to 0.2% month-over-month (MoM) in July.