Gold Stuck at Key Resistance as Oil Prices Ease Inflation Pressure

Gold prices continued their consolidation trend in the Asian session on September 21, trading around $4,360 after a strong rebound last week. The precious metal had fallen to a low of $4,235 following the Federal Reserve's rate hike before staging a two-day rally to reach $4,399.75. However, it failed to break above the key resistance level of $4,400.

The Fed remains hawkish, with Minneapolis Fed President Neel Kashkari stating that U.S. inflation remains too high across multiple sectors of the economy and expressing support for further rate hikes. This has put pressure on non-yielding gold. However, falling oil prices have eased concerns about energy costs driving up CPI and PCE, reducing pressure on the Fed to rapidly raise rates.

The price of WTI crude briefly fell to $94, while Brent crude dropped to around $101.71, both declining by over 1.5%. If oil prices continue to retreat and U.S. Treasury yields decline accordingly, conditions for gold to break back above $4,400 will improve.