Gold drifts lower as traders look to US CPI report for Fed rate cues amid Iran uncertainty
Gold (XAU/USD) meets with fresh supply during the Asian session on Tuesday, reversing a part of the previous day's strong move up to the $4,150 resistance zone amid a modest US Dollar (USD) uptick.
Gold experienced a decline in value as traders awaited the U.S. Consumer Price Index (CPI) report and an upcoming Federal Reserve (Fed) rate decision. The dip in gold prices came after a brief surge to the $4,150 resistance level, driven by an increase in the U.S. dollar (USD). Traders found themselves uncertain about the negotiations between the U.S. and Iran, causing a shift in their focus towards the CPI report.
The U.S. Federal Reserve (Fed) had raised interest rates, strengthening the USD and providing some support to investors. However, the geopolitical situation remained volatile, with mixed signals from both sides. The technical analysis of the gold situation indicated a bullish near-term bias, with potential support near the 200-period SMA at $4,103 and the 23.6% Fibonacci retracement at $4,059.
Traders were expected to monitor the CPI report closely for further indications on the USD's future path, before making any decisions on gold.
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