Gold prices are bullish amidst the crisis! Tonight's CPI will determine its fate.
2025-09-11 10:33:08
Spot gold fluctuated at a high level around $3,640 per ounce during the Asian session on Thursday (September 11). As the 14-day relative strength index (RSI) was still in the overbought area, gold prices may need to go through a period of consolidation before rising further.
Spot gold remains bullish on expectations of a Federal Reserve rate cut, a weaker dollar and global geopolitical risks. The market is closely watching the U.S. Consumer Price Index (CPI) data for August, which will be released later on Thursday.
The weaker-than-expected increase in the U.S. Producer Price Index in August further reinforced market expectations that the Federal Reserve will cut interest rates at its next policy meeting. This expectation continues to put pressure on the US dollar and provide support for dollar-denominated commodity prices. Lower interest rates may reduce the opportunity cost of holding gold, which is positive for the non-interest-bearing asset.
According to data from the CME FedWatch tool, the market expects the Federal Reserve to increase its easing efforts. The money market is currently fully pricing in the expectation of a 25 basis point rate cut at the Fed's September meeting, and the probability of a 50 basis point rate cut has risen to around 10%.
Meanwhile, escalating geopolitical tensions in Europe and the Middle East fueled safe-haven flows, further boosting gold prices. Geopolitical risks in Europe heightened significantly after Poland shot down a drone that crossed Russia's border during its latest attack on Ukraine. Furthermore, Israel launched an attack on Doha, Qatar, on Tuesday, targeting senior Hamas leaders. Qatar claimed that the Israeli action violated international law and could further escalate the Middle East conflict.
Gold prices will likely seek further guidance from the U.S. August CPI inflation report, due later Thursday. Markets expect the headline CPI to rise 2.9% year-over-year in August, while the core CPI is expected to rise 3.1% over the same period. A higher-than-expected inflation reading could strengthen the dollar and limit precious metals' price gains.
Technical indicators show that RSI is overbought and gold prices are poised to rise.
From a technical perspective, the daily RSI of gold prices is in the overbought range, and gold prices may need to go through a period of consolidation before rising further.
On the downside, the $3,600 mark and $3,580 (near this week's low) form initial support areas. If it falls below this level, gold prices may continue to pull back and test the intermediate support area of $3,565-3,560, and further towards last Thursday's low (near $3,510).
On the upside, the recent historical high of $3,675, which gold prices have challenged, still constitutes a strong resistance level. If buying momentum continues, gold prices may take advantage of the recent upward trend to further attack the psychological mark of $3,700.
(Spot gold daily chart, source: Yihuitong)
At 10:10 Beijing time, spot gold was trading at $3,643.08 per ounce.
Spot gold remains bullish on expectations of a Federal Reserve rate cut, a weaker dollar and global geopolitical risks. The market is closely watching the U.S. Consumer Price Index (CPI) data for August, which will be released later on Thursday.
The weaker-than-expected increase in the U.S. Producer Price Index in August further reinforced market expectations that the Federal Reserve will cut interest rates at its next policy meeting. This expectation continues to put pressure on the US dollar and provide support for dollar-denominated commodity prices. Lower interest rates may reduce the opportunity cost of holding gold, which is positive for the non-interest-bearing asset.
According to data from the CME FedWatch tool, the market expects the Federal Reserve to increase its easing efforts. The money market is currently fully pricing in the expectation of a 25 basis point rate cut at the Fed's September meeting, and the probability of a 50 basis point rate cut has risen to around 10%.
Meanwhile, escalating geopolitical tensions in Europe and the Middle East fueled safe-haven flows, further boosting gold prices. Geopolitical risks in Europe heightened significantly after Poland shot down a drone that crossed Russia's border during its latest attack on Ukraine. Furthermore, Israel launched an attack on Doha, Qatar, on Tuesday, targeting senior Hamas leaders. Qatar claimed that the Israeli action violated international law and could further escalate the Middle East conflict.
Gold prices will likely seek further guidance from the U.S. August CPI inflation report, due later Thursday. Markets expect the headline CPI to rise 2.9% year-over-year in August, while the core CPI is expected to rise 3.1% over the same period. A higher-than-expected inflation reading could strengthen the dollar and limit precious metals' price gains.
Technical indicators show that RSI is overbought and gold prices are poised to rise.
From a technical perspective, the daily RSI of gold prices is in the overbought range, and gold prices may need to go through a period of consolidation before rising further.
On the downside, the $3,600 mark and $3,580 (near this week's low) form initial support areas. If it falls below this level, gold prices may continue to pull back and test the intermediate support area of $3,565-3,560, and further towards last Thursday's low (near $3,510).
On the upside, the recent historical high of $3,675, which gold prices have challenged, still constitutes a strong resistance level. If buying momentum continues, gold prices may take advantage of the recent upward trend to further attack the psychological mark of $3,700.
(Spot gold daily chart, source: Yihuitong)
At 10:10 Beijing time, spot gold was trading at $3,643.08 per ounce.
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