Gold Price Forecast: XAU/USD holds ground above $1,910 to retrace the recent losses

• XAU/USD recovers from the recent losses ahead of US CPI data.
• US CPI is expected to grow in August from the previous month.
• Inflation aberration could reinforce the hawkish tone surrounding the Fed, which could lift the US Dollar (USD).

Gold price attempts to snap the previous day’s losses, trading higher around $1,910 per troy ounce during the early trading hours of the Asian session on Wednesday. The pair is experiencing an uptick due to the downbeat US Dollar (USD).

However, the prices of Gold face challenges due to the market caution ahead of the release of inflation data from the United States (US), which is scheduled to be released later in the North American session.

The US Consumer Price Index (CPI) is expected to exhibit a 0.5% month-on-month increase, which is an improvement from the previous month’s 0.2% reading. Meanwhile, the Core CPI figure, which excludes volatile food and energy prices, is anticipated to remain steady at 0.2%.

These figures may provide insights into the overall inflationary trends in the US economy and can have an impact on market sentiment and trading decisions on USD-denominated yellow metal.

Investors have been factoring in the possibility of a 25 basis point (bps) interest rate hike by the US Federal Reserve (Fed) in November or December meetings. Along with this, the Fed is expected to sustain higher interest rates over a prolonged period. Higher inflation could reinforce the hawkish sentiment, which may lift the buck and put a selling pressure on the Gold prices.

US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against the other major six currencies, looks to extend its losing streak for the fourth successive trading session. Spot price trades around 104.50 at the time of writing. However, the Greenback is anticipated to remain resilient, supported by the further increase of economic activities in the US.

US Retail Sales growth figures are projected to exhibit a slight slowdown scheduled to be released on Thursday. The market consensus for August shows a 0.2% increase. While this is still a positive number, it represents a decline from the previous month's growth of 0.7%. These figures may offer insights into consumer spending patterns and can influence market sentiment.