Gold climbs above $4,400 as traders eye US CPI and Fed hike odds

Gold rose above $4,400 on Wednesday, its highest level since early June, as markets await the US July CPI report for clues on the Federal Reserve’s rate‑path outlook【2】.

Price action and technical backdrop

Spot gold reclaimed the $4,400 mark, edging toward the two‑month peak recorded on June 5. The metal’s daily chart shows it trading just above the 100‑day simple moving average (SMA) at $4,388, while the 200‑day SMA sits near $4,500, forming a ceiling that could restrain further upside【2】. Momentum indicators remain bullish, with the RSI hovering in the low‑70s, but the proximity to key SMA resistance suggests a breakout would be needed for a sustained rally.

Drivers behind the move

Geopolitical tension in the Middle East kept the safe‑haven USD strong, supporting gold’s price despite the recent dollar weakness on Asian equities【1】. At the same time, the US labor market showed signs of cooling, prompting traders to price in a high probability of a Fed rate hike later this year, according to the CME FedWatch tool (over 75% chance)【2】. This expectation underpins higher Treasury yields, which traditionally bolster the dollar and cap gold’s gains.

The upcoming US CPI release is central to the market’s next move. Analysts forecast headline inflation at 3.4% YoY, slightly below June’s 3.5%, and core inflation at 2.5% YoY, down from 2.6%【3】. A reading in line with or below these forecasts could revive expectations of a more dovish Fed stance, potentially lifting gold further. Conversely, a surprise increase would reinforce the case for additional rate hikes, likely limiting gold’s upside.

Market context

The Reserve Bank of Australia’s policy decision on Tuesday and the US CPI on Wednesday dominate the macro calendar, leaving little other data to move markets【1】. Oil prices have remained near a 1½‑week high as the Strait of Hormuz stays blocked, adding inflationary pressure and supporting the safe‑haven narrative for both gold and the dollar【2】.

What to watch

• US CPI release (July) – watch for the headline and core numbers relative to the 3.4%/2.5% forecasts.
• Key technical levels – $4,500 resistance (200‑day SMA) and $4,388 support (100‑day SMA).
• Fed policy outlook – CME FedWatch probability of a rate hike staying above 75% could keep yields high and cap gold’s rally.

Gold’s ability to break above the $4,500 barrier will hinge on whether July’s inflation data eases expectations for further Fed tightening, or whether geopolitical risks continue to drive safe‑haven demand. The market remains poised between these two forces.