XAU/USD eyeing $1,930 ahead of Wednesday's US CPI print

• Gold is seeing a soft retreat as US inflation data looms ahead.
• An upbeat US CPI read could send Gold lower.
• USD flows to determine the direction of XAU/USD as investors react to market inflation outlook.

The XAU/USD is stepping lower in Tuesday trading, testing the $1,910.00 level as investors await US inflation figures on Wednesday’s Consumer Price Index (CPI) data release.

Metals investors will be taking a step back ahead of US inflation figures due tomorrow, and a firming up of the US Dollar (USD) index is taking the yellow metal down a peg, dropping below near-term bottoms and etching in a new low for the month of September. 

US CPI figures to drive Gold flows on Wednesday

If US CPI figures come in or above expectations, it could put further downside pressure on Gold. Headline CPI data for the month of August is forecast to come in at 0.6%, a step up from the previous month’s 0.2%. Core CPI (CPI excluding food and energy prices) for the same period is expected to hold steady at 0.2%.

Looking ahead to Thursday, US Retail Sales growth figures are expected to show a slight cooling off. August’s Retail Sales data is expected to print at 0.2%; still a positive number, but a reduced showing from the previous month’s 0.7% growth.

A disappointing showing for economic calendar data could see a firm round of support for the XAU/USD, but increasing economic activity will send the Greenback higher and push Gold another step down.

XAU/USD technical outlook

Gold is slightly lower in the early trading week, down from Monday’s opening prices near $1,920.00, and daily candlesticks are so far getting suppressed by a descending trendline from May’s high peak above $2,050.00. Adding to the resistance cloud gathering above Gold prices, the 100-day Simple Moving Average is descending to $1,950.00, and an inversion of the 50-day Exponential Moving Average sees the EMA building resistance into $1,930.00.

On the short side, support is coming from August’s swing low into $1,890.00, and despite consecutive lower lows on the daily chart, bearish momentum is waning as the fast and slow EMAs on the MACD indicator begin to consolidate.

XAU/USD daily chart

XAU/USD technical levels