Gold Holds Above $2,410 as Market Eyes CPI Data and Fed Signals
Gold (XAU/USD) is trading at $2,412, edging higher by 0.28% on the day after finding strong support near $2,395. The metal has consolidated in a narrow range between $2,395 and $2,420, with traders awaiting fresh macroeconomic cues from U.S. inflation data and upcoming Federal Reserve commentary. Despite muted volatility in the last two sessions, gold remains near its all-time high of $2,449 reached in July, signaling persistent underlying demand. The consolidation follows a sharp rebound from August’s early low of $2,357, with the August average price tracking near $2,412 compared to July’s $2,386 and June’s $2,350, reinforcing the longer-term bullish trajectory.
Technical Structure Shows Consolidation Before Potential Breakout
From a technical perspective, gold is holding above its 50-day moving average near $2,387 and well above its 200-day moving average at $2,280, maintaining a solid upward bias. On the daily chart, the $2,395–$2,400 zone has acted as a firm base, with resistance emerging around $2,425–$2,430. The four-hour chart shows price action compressing into a mild ascending triangle pattern, suggesting bullish continuation if the $2,430 ceiling is breached. RSI is at 61, indicating room for further upside before overbought conditions emerge, while MACD remains in positive territory, supporting the case for an upward push.
Central Bank Demand Remains a Critical Support
Central banks continue to underpin gold’s structural demand. The People’s Bank of China has extended its gold buying streak, with reserves now estimated at 72.8 million ounces, while the Reserve Bank of India has increased holdings to over 850 tonnes. Several emerging market central banks have also signaled intentions to add to reserves in the second half of 2025, reinforcing gold’s role as a hedge against currency depreciation and geopolitical uncertainty. This accumulation trend has reduced available market supply, adding to the long-term bullish case.
Macro and Policy Factors Drive Safe-Haven Appeal
A backdrop of persistent geopolitical tensions, particularly in Eastern Europe and the South China Sea, has kept safe-haven demand elevated. Simultaneously, expectations for the Federal Reserve to deliver at least two rate cuts by the end of the year are softening the U.S. dollar, making gold more attractive to foreign investors. The CME FedWatch tool now prices a 72% probability of a 25-basis-point cut in September, up from 58% last week, which has helped anchor gold above $2,400. Inflation expectations, measured by the 10-year breakeven rate, remain steady near 2.3%, suggesting that gold’s role as an inflation hedge remains relevant even as headline CPI trends lower.
Mining Supply Constraints Add to Price Support
Gold mining supply remains tight, with global output growth projected at just 1.5% for 2025 according to World Gold Council data. Major producers in South Africa and Australia have reported lower-than-expected output due to labor strikes and rising extraction costs, while new project pipelines remain thin. This structural supply limitation, combined with strong reserve accumulation by central banks, is helping to maintain a favorable demand-supply balance in the market.
Investor Positioning Signals Strong Underlying Bid
ETF holdings in gold have stabilized after months of outflows, with SPDR Gold Shares (GLD) reporting inflows of $1.2 billion over the past two weeks. Managed money net longs on COMEX have risen to a six-month high, indicating renewed speculative interest. While open interest remains below peak 2020 levels, the steady build-up in long positions underscores the market’s readiness to push prices higher if macro catalysts align.
Final Verdict: Buy on Break Above $2,430
Gold remains well-supported above $2,400 with multiple tailwinds from central bank demand, supply constraints, and macroeconomic conditions favoring a softer dollar. A decisive breakout above $2,430 could open a quick path to retest the $2,449 all-time high and potentially extend toward $2,475 in the short term. The bias is Buy on a confirmed break above resistance, with a Hold stance within the current range, and risk control advised if prices close below $2,395, which would signal a short-term momentum shift.
