FX.co ★ Sud | XAU/USD, GOLD

Gold prices (XAU/USD) came under renewed downward pressure during Friday's Asian trading session, falling to around $4,320 per ounce. A combination of macroeconomic developments and monetary policy expectations weighed on the precious metal. The primary driver of this selling pressure was stronger-than-expected US Producer Price Index (PPI) inflation data released by the US Bureau of Labor Statistics on Thursday, coupled with the continued rise in global oil prices. Official data showed that the US PPI rose 5.4% year-on-year in August, a significant acceleration from the upwardly revised 4.8% in July and far exceeding economists' expectations of 5.3%. Meanwhile, the core PPI rose 4.6% year-on-year, in line with market expectations and higher than the upwardly revised 4.3% in July. The year-on-year PPI and core PPI rose 0.4% and 0.2%, respectively, in August. Continued inflation data has heightened anxiety in financial markets, prompting participants to reassess their expectations regarding monetary policy. As a result, market expectations for an interest rate hike by the Federal Reserve have risen significantly. The CME FedWatch tool indicates that traders now anticipate a 70% probability of the Fed tightening monetary policy at its next meeting, a sharp increase from 62% before the data release. Kyle Rodda, senior financial markets analyst at capital.com, confirms that this data clearly points to growing underlying inflationary pressures in the US economy, partly due to increased energy spending. Furthermore, escalating geopolitical tensions in the Middle East have exacerbated concerns about supply disruptions, further fueling inflation fears. Specifically, Iran's announcement of attacks on ten ships near the Strait of Hormuz in retaliation for the US attack on five Iranian oil tankers, along with threats from the Iranian Revolutionary Guard to escalate the conflict, have significantly heightened market anxiety. These developments create a negative environment for gold, as the precious metal, a non-income asset, is affected by expectations of rising interest rates and the emergence of more attractive investment vehicles offering higher returns. Strategists at TD Securities emphasize the market's extreme sensitivity to upcoming economic data. They noted that while the recent strong jobs report initially put downward pressure on gold prices, subsequent dovish statements and monetary interventions helped stabilize market sentiment. The analysts stressed that the upcoming US Consumer Price Index (CPI) report, due later today, is the next major market catalyst. They cautioned that any unexpected upward revision in CPI could reinforce the Federal Reserve's aggressive pricing strategy and further damage gold prices, while weak inflation data could finally unleash long-dormant non-essential consumer spending. Technically, the gold/US dollar pair (XAU/USD) continues to show a clear bearish bias on the daily chart. The recent upward momentum has gradually faded, returning to a more consolidation range. Currently, the price is under pressure below the 100-day simple moving average and the middle Bollinger Band. The Relative Strength Index (RSI) is hovering around 45, just below the neutral midpoint, reflecting weakening upward momentum rather than oversold conditions. The immediate technical resistance level is near the 100-day SMA, around $4,340; the medium-term resistance level is near the middle Bollinger Band, around $4,465; and if buyers manage to gain control, the resistance level near the upper Bollinger Band at $4,675 will present a significant challenge. On the other hand, the immediate bearish support level is near the lower Bollinger Band, around $4,252. A daily close below this key support level could trigger a stronger bounce, targeting the historical support zone.