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Gold prices remain near weekly highs of around $2,520 as traders await key US inflation data, which could influence the Federal Reserve’s policy decisions. Market sentiment is cautious, with investors expecting a potential rate cut from the Fed, especially if the Consumer Price Index (CPI) shows signs of cooling inflation. The USD weakness and volatility in equity markets are driving haven flows into gold. From a technical standpoint, resistance is seen near the $2,525-$2,526 supply zone a break can see a further rally towards the $2558 level, with further gains possible if this level is breached. On the downside, immediate support is around $2,495, with additional support near $2,470 and $2,450, marking critical technical levels.

Key Highlights

# Gold price continues to hover near weekly highs amid cautious market sentiment.

# Traders await US CPI data to gauge the Federal Reserve's future rate cuts.

# USD weakness and equity market volatility drive haven flows into gold.

# Technical resistance was observed around the $2,525-$2,526 supply zone which can extend towards $2558.

# Downside support remains near $2,495, with critical levels at $2,470 and $2,450.

Gold prices are maintaining a positive stance for the third consecutive day, trading close to a fresh weekly high of around $2,520. The market sentiment remains cautious ahead of the release of US inflation data, with traders refraining from placing aggressive bets. The upcoming Consumer Price Index (CPI) report is crucial as it will provide insights into the Federal Reserve's next moves, potentially signalling the start of a policy easing cycle. This speculation is contributing to modest USD weakness, which, along with a generally shaky equity market, is supporting haven flows towards gold.

The focus remains on the prospects of a Federal Reserve rate cut in September. Current expectations suggest that the US central bank could opt for a 25-basis-point reduction, particularly if inflation data shows further cooling. The anticipation of a weaker inflation reading has kept gold prices supported, while the broader market awaits confirmation from the CPI release. On the other hand, stronger-than-expected inflation might have a limited reaction in terms of curbing gold's bullish momentum, as traders are largely pricing in rate cuts.

From a technical perspective, resistance is noted near the $2,525-$2,526 supply zone which can extend towards $2558. A break above this level could trigger fresh buying interest, pushing gold higher toward $2,532 and beyond. On the downside, immediate support lies at the $2,500 psychological mark, followed by stronger support at $2,470 and $2,450, where the 50-day Simple Moving Average resides.

Finally

Gold prices are poised for further gains if US inflation data aligns with easing expectations, with key levels at $2,525/$2558 and support near $2,500.

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