GOLD hesitates, inflation data day in focusOANDA:XAUUSD came under pressure on Monday (August 11) and recovered slightly this morning, Tuesday (August 12). US President Trump made it clear that he would not impose tariffs on gold imports, erasing earlier market concerns about disruptions to the global gold supply chain. Investors are now turning their attention to US inflation data, due to be released this week, to gauge the Federal Reserve's interest rate outlook.
Tariff doubts dissipated
Trump tweeted: "There will be no tariffs on gold!" without providing further details. The announcement brought relief to the global gold market.
As a global gold transit and refining hub, Switzerland was once considered the "biggest victim" but Trump's latest statement essentially eliminated that risk.
Investor focus shifts to inflation
As the tariff uncertainty fades, traders will turn their attention to other market factors, the most important of which is the Federal Reserve's interest rate outlook.
• If US inflation data comes in higher than expected, this could give the Federal Reserve reason to pause its rate cut in September, which would put pressure on gold prices;
• But if the data is mild or even weak, this is expected to support gold prices as market expectations of lower interest rates are further reinforced.
Market Outlook
In the short term, gold is entering a correction phase after tariff concerns are resolved, and price movements may be more influenced by US dollar and inflation data.
If inflation remains low and the US Federal Reserve (Fed) sends a dovish signal, gold prices are expected to maintain high support levels; however, if inflation exceeds expectations and the US dollar strengthens, gold prices may face the risk of a deeper correction.
In the medium to long term, gold remains valuable as a safe haven and an asset allocation channel amid global economic uncertainty and the possibility of low interest rates.
The market expects core CPI to rise to 3.0% year-on-year in July, up from 2.9% in June. The pass-through of tariff costs could spur a rebound in goods inflation.
• If the data beats expectations, the Federal Reserve could delay a rate cut.
• Conversely, a weaker reading would increase the odds of a rate cut in September, with futures currently implying an 87% chance.
Technical Outlook Analysis OANDA:XAUUSD
Gold recovered, operating around the EMA21, showing that the overall market sentiment is still hesitant to wait for a breakthrough impact from the fundamental side.
In the short term, gold is under technical pressure from the EMA21, and the 0.236% Fibonacci retracement level, and for gold to have all the conditions for a continued bullish expectation, it needs to break above the said Fibonacci retracement level, after which the short-term target is the raw price point of 3,400 USD.
If gold continues to break the raw price point of 3,400 USD and operates above this level, the possibility of a new bullish cycle will be opened with the next target at 3,430 USD - 3,450 USD.
On the other hand, gold is still above $3,300, which does not allow the conditions for a bearish cycle to appear. That means as long as gold remains above the original price point of $3,300 and the 0.382% Fibonacci retracement level, it can still increase in the short term.
In case gold sells below $3,300, it will be eligible for a bearish cycle, the target then will be $3,246 in the short term, more than the 0.50% Fibonacci retracement level.
On the momentum front, the RSI hovers around the 50 mark, indicating a hesitant market sentiment, but an upward bend from 50 would be a positive signal for upside potential.
For the day, the overall outlook remains bullish and the key points to watch are listed below.
Support: $3,340 – $3,310 – $3,300
Resistance: $3,371 – $3,400
SELL XAUUSD PRICE 3377 - 3375⚡️
↠↠ Stop Loss 3381
→Take Profit 1 3369
↨
→Take Profit 2 3363
BUY XAUUSD PRICE 3298 - 3300⚡️
↠↠ Stop Loss 3294
→Take Profit 1 3306
↨
→Take Profit 2 3312
