On Friday (September 11), spot gold rebounded, recovering most of the previous day's losses. A weaker dollar and declining US Treasury yields, along with falling oil prices, provided support for the precious metal. However, the latest US Consumer Price Index (CPI) data reinforced market expectations that the Federal Reserve may raise interest rates next week, thus limiting the upside potential for gold prices. At the time of writing, spot gold was trading around $4370, up 1.20% on the day, having briefly tested the $4400 level. Gold prices plunged nearly 2% on Thursday as soaring oil prices fueled inflation concerns, pushing U.S. Treasury yields to multi-year highs. The benchmark 10-year Treasury yield touched 4.97% in early trading, its highest level since October 2023, before retreating to around 4.91%. Meanwhile, West Texas Intermediate (WTI) crude oil briefly rose above $100 before falling back to around $96.50, down about 4% on the day. Despite the sharp pullback in oil prices, WTI crude is still on track for its second consecutive week of gains. The U.S. CPI data was largely in line with market expectations, with limited short-term market reaction. The overall CPI rose 0.4% month-on-month in August, in line with expectations and higher than July's 0.1% increase; the year-on-year increase remained unchanged at 3.4%, also in line with market forecasts. The core CPI, excluding volatile food and energy prices, rose 0.3% month-on-month, higher than the expected 0.2% and the previous value; the core CPI year-on-year increase fell from 2.5% to 2.4%, in line with expectations. Gasoline prices rose 3.9% in August, contributing more than a third to the overall monthly CPI increase. The US dollar strengthened briefly after the CPI data release, but the upward momentum was short-lived. The US Dollar Index (DXY) surged to 99.36 immediately after the data release, but has since retreated to around 99. Prior to the CPI, the US Producer Price Index (PPI) released on Thursday showed that producer inflation rose 5.4% year-on-year in August from 4.8% in July. According to the CME FedWatch Tool, the market is currently pricing in an 85% probability of a 25 basis point rate hike at the Fed's September 15-16 policy meeting, a significant increase from 67% earlier in the day. TD Securities stated, "Even with rising energy prices and an increased probability of a short-term Fed rate hike, gold has held its support level at higher levels." The bank believes that "strong economic data and a hawkish Fed stance may only trigger a small, short-term sell-off in gold prices, delaying the start of the next upward trend, and will not lead to a deep decline." From a medium- to long-term perspective, TD Securities points out that "renewed expectations of dollar depreciation, continued gold purchases by central banks, and renewed inflows into ETFs have built a solid bottom support." This confirms the assessment that even if gold weakens in the short term, its downside is likely limited given the overall positive environment. Technical Analysis: Gold's rebound has encountered resistance; the 200-day moving average is a key level . (Spot Gold Daily Chart Source: FX678) Spot gold maintains a moderately bullish trend, with prices holding above the 50-day and 100-day moving averages, indicating continued buying pressure after the recent pullback. However, the upward movement is constrained by the 200-day moving average around $4537, limiting the overall upward trend. Looking at the moving average system in the chart, the 50-day moving average is around $4430, the 100-day moving average around $4385, and the 200-day moving average around $4537. Currently, gold is trading around $4374, slightly below the 100-day moving average, suggesting a short-term consolidation at higher levels. The daily Relative Strength Index (RSI) is around 48, not yet in overbought territory; the MACD histogram is close to the zero line, indicating weak short-term momentum. The Average Directional Index (ADX) is at a low level, suggesting the market is more likely in a consolidation phase and has not yet established a clear directional trend. Downside support: If gold prices break below the current range, the first support level to watch is the $4300-$4320 area; if the weakness continues, the next target is the 50-day moving average around $4270, followed by $4150 and the psychological level of $4000. Upside resistance: The 200-day moving average around $4537 remains a key resistance level. If prices continue to hold above this level, the bearish structure will be weakened, and the bulls may be able to open up further upside potential.