Gold Steady Near $3,350 as CPI Data and Tariff-Driven Inflation Loom

Gold Steady Near $3,350 as CPI Data and Tariff-Driven Inflation Loom

Gold (XAU/USD) is holding firm around $3,350 on Tuesday during the European session, as traders await the release of US Consumer Price Index (CPI) data for June. The precious metal has recovered from Monday’s dip, supported by market caution surrounding rising tariff-related inflation risks.

Markets Await US CPI Release at 12:30 GMT

The June CPI report, due at 12:30 GMT, is expected to significantly influence the Federal Reserve's stance on interest rates.

• Headline CPI is forecast to climb to 2.7% YoY from 2.4%.
• Core CPI, excluding food and energy, is expected at 3.0% YoY, up from 2.8%.

These figures are crucial, as stronger inflation could delay any plans by the Federal Reserve (Fed) to ease rates, thereby increasing demand for interest-bearing assets over non-yielding assets like gold.

Tariff Impact Heightens Inflation Concerns

Markets are on edge after President Trump renewed threats of "very severe" tariffs on Russia, with possible secondary tariffs on countries importing Russian oil. Traders are increasingly pricing in the inflationary effects of such tariffs, which could ripple through consumer prices.

A hotter-than-expected CPI could push the Fed toward a more hawkish stance, reducing the appeal of gold in the short term. Conversely, weaker CPI data may increase demand for gold as a hedge against uncertainty and lower real yields.

Gold Technical Outlook

• Resistance: $3,371 – A confirmed breakout above this could open further upside potential.
• Support: $3,337 – Holding this level could maintain current momentum.

Gold remains in a tight range, but the upcoming inflation print may provide the catalyst for a decisive move.

Explore More on Tredu.com:

• US Dollar Struggles Ahead of CPI as Inflation Risks Mount
• Silver Nears 14-Year High Amid Tariff Fears and Fed Uncertainty
• How Tariff Inflation Could Derail the Fed’s Rate Path