FX.co ★ Helsinki | XAU/USD, GOLD

Gold is kicking off Federal Reserve policy week on a muted note, hovering near $4,330 as traders digest a wave of inflation data that has dramatically reshaped rate expectations. Last week's hotter-than-anticipated Producer Price Index and Consumer Price Index reports did the heavy lifting, with producer price inflation accelerating to 5.4% year-on-year from July's 4.8% reading. Consumer price data came in broadly in line on headline and core terms, but the monthly core print rose 0.3%, outpacing forecasts and July's 0.2% gain. That combination pushed the CME FedWatch tool's implied probability of a Wednesday rate hike up to 86.5%, a sharp jump from 59.5% before those releases landed. The implications for gold are straightforward: rising rate expectations lift returns on interest-bearing assets, eroding the appeal of a metal that pays no yield. Reinforcing that headwind, the 10-year US Treasury yield is hovering near 4.99%, its highest level since November 2023, making bonds considerably more attractive than bullion on a relative basis. Political noise has added a layer of unpredictability. Speaking to reporters at the Irish Open golf tournament over the weekend, President Donald Trump admitted he did not know whether Fed officials would raise rates this week, though he argued the US "should pay the lowest interest rate in the world" regardless of what inflation and economic data suggest. That remark marks a striking reversal for a president who spent years criticizing former Fed Chair Jerome Powell for failing to cut rates. Meanwhile, National Economic Council Director Kevin Hassett told Fox News on Sunday that Trump would "primarily defend the independence of Kevin Warsh," regardless of the Fed's rate decision, comments that may ease concerns about political interference even as the policy path remains firmly hawkish.

Gold is trading near $4,330, sitting beneath every major moving average across both the hourly and four-hour timeframes, a configuration that confirms sellers retain the upper hand heading into this pivotal week. On the hourly chart, the 50-period moving average rests at $4,358 while the 200-period average sits at $4,391, meaning price is roughly $28 below the shorter average and about $61 beneath the longer one. Those levels now function as the first two ceilings any recovery attempt must overcome. On the four-hour chart, the 50-period average is positioned at $4,392 with the 200-period average at $4,370, placing price roughly $40 to $62 below both. Notably, the hourly 200-period average at $4,391 and the four-hour 50-period average at $4,392 form a tight resistance cluster around $4,390–$4,392, making that zone a formidable barrier. Until price reclaims the hourly 50-period average at $4,358, the near-term bias stays tilted downward. The first resistance barrier sits at $4,360, aligning closely with the hourly 50-period average and marking a level that has repeatedly capped rebounds. Beyond that, $4,390–$4,395 forms a supply zone reinforced by the hourly 200-period and four-hour 50-period averages. A heavier hurdle follows at $4,420, with $4,450 and $4,480 marking further ceilings if buyers gain traction. On the downside, initial support is found at $4,300, a psychologically significant round number that has cushioned recent declines. A break below would expose $4,270, then $4,240, with $4,200 marking a deeper demand area. Looking ahead, if gold holds above $4,300 and pushes through $4,360, buyers could target the $4,390–$4,395 cluster and potentially $4,420 beyond it. Should selling pressure intensify and $4,300 give way, a deeper correction toward $4,270 and $4,240 becomes increasingly probable. The broader structure remains bearish so long as price stays beneath the four-hour 200-period average at $4,370, but direction this week will hinge on whether buyers can defend $4,300 and how markets digest Wednesday's Fed decision.