Gold Price Surges Above $4,400 as US Inflation Eases Fed Hike Fears

The US inflation data for July showed a slight dip to 3.5% year-over-year, down from 3.6%, while core CPI edged lower from 2.6% to 2.5%. This easing of inflation pressure has shifted the odds in favor of the Federal Reserve keeping rates steady at its September meeting, with Prime Terminal data showing a 60% chance of no rate hike. The US central bank still has a 73% chance of raising rates in December, but the recent dip in inflation has given investors some relief.

The gold price has been gaining traction, clearing the 100-day Simple Moving Average at $4,388 and potentially opening up further upside. Momentum indicators show buyers are gaining strength, making an upward path the most likely scenario in the short term. The first resistance level for gold is at $4,450, with a breach exposing the 200-day SMA at the psychological $4,500 mark.

However, if gold falls below its daily low of $4,362, it could open up deeper pullbacks, with support levels at $4,300 and then $4,202. The current geopolitical tensions, particularly in the Strait of Hormuz, continue to weigh on energy prices and threaten to halt the disinflation process in the US.