Gold prices approach a record high as markets await US inflation data

Gold prices rose for the third consecutive day on Wednesday morning, approaching a new all-time high.

Investors are awaiting the release of the US August CPI report to gain clarity before next week’s Federal Reserve policy meeting.

If the August inflation data meets or exceeds expectations, it would suggest that inflation is on a downward path towards the Fed’s 2% target, increasing the likelihood of a 25 basis point rate cut.

Markets widely anticipate that the Fed will implement three 0.25% rate cuts by year-end, though more aggressive actions cannot be entirely ruled out given recent weaker-than-expected US economic data, which has renewed recession concerns.

The yellow metal is expected to remain well-supported due to anticipated policy easing and rising geopolitical tensions, which continue to drive safe-haven demand.

Investors are focusing on economic data rather than political events, such as the US Presidential debate, which have not significantly impacted sentiment.

Technical indicators on the daily chart remain bullish, reinforcing a positive outlook.

Despite potential resistance at record high levels, a breakout above the multi-week consolidation range is likely. A breach of the $2431 peak could lead to targets at $2554 and $2568 (Fibonacci projections), with a round figure barrier at $2600, which many analysts see as a potential target for the year.

In the near term, gold prices are expected to maintain an upward bias as long as they stay above the psychological $2500 support, which also marks the midpoint of the recent $2531/$2470 range.

Res: 2531; 2554; 2568; 2600
Sup: 2514; 2507; 2500; 2480