Gold Price Rises Ahead of US CPI Data, Trade Deal Limits Gains

Gold Edges Higher Ahead of US Inflation Data Amid Eased Safe-Haven Demand

Gold Rises Cautiously Ahead of Key CPI Inflation Report

Gold (XAU/USD) moved modestly higher on Wednesday during the European session, trading above $3,330, as investors braced for the latest US Consumer Price Index (CPI) figures for May. The data is expected to offer crucial insights into inflation pressures and the Federal Reserve's (Fed) upcoming policy decisions.

Provisional US-China Trade Deal Limits Gold Upside

Safe-haven demand for gold has been mildly capped after the US and China signed a provisional trade agreement during talks in London. The deal includes concessions on education and rare earth exports, and has slightly reduced geopolitical tension—limiting gold’s usual upside from uncertainty-driven flows.

Inflation Data Remains in Focus

Market forecasts indicate that:

Headline CPI is expected to rise by 2.5% YoY, up from 2.3% in April.
Core CPI, which excludes food and energy, is projected to rise by 2.9%, compared to 2.8% previously.

If the data confirms rising inflation, it could lead the Fed to maintain its current interest rate stance longer, which is typically bearish for gold, as it yields no interest.

Market Outlook for Gold

Gold remains sensitive to interest rate expectations and macroeconomic indicators. A hotter-than-expected CPI reading could cap further gains, while a weaker print may boost the metal as markets price in future Fed rate cuts.