Gold steadies after a 2% selloff, with traders turning their focus to upcoming U.S. inflation figures for fresh market cues

Gold edged higher in early Friday trading, recovering modestly after Thursday’s sharp 2% decline as investors engaged in profit-taking while awaiting key U.S. inflation data for fresh direction.

The precious metal came under significant pressure following a surge in oil prices and growing expectations that the Federal Reserve could raise interest rates at its September meeting. Today’s inflation report is expected to provide a crucial signal for policymakers ahead of next week’s decision.

Despite persistent bearish pressure, sellers have so far been unable to break the important Fibonacci support at $4,319, which marks the 50% retracement of the rally from $3,942 to $4,697. However, the downside risk remains elevated as pressure continues to build around this key level.

Ongoing geopolitical tensions and the potential for further gains in oil prices are adding to the negative outlook for gold. A decisive break below $4,319 would confirm a bearish failure swing pattern and reinforce expectations of further losses, opening the way toward support levels at $4,268, near the top of the daily Ichimoku cloud, and $4,230, the 61.8% Fibonacci retracement level.

Technical indicators continue to favor the downside. Daily studies show strong negative momentum, supported by multiple moving-average bearish crossovers. Meanwhile, the daily Ichimoku cloud is narrowing and is set to form a bearish twist next week, which could act as an additional magnet for prices.

On the upside, only a sustained recovery above the $4,400 area, where the 10-day moving average converges with the broken 38.2% Fibonacci retracement level, would ease bearish pressure and signal scope for a stronger corrective rebound.

Res: 4364; 4388; 4408; 4461
Sup: 4319; 4268; 4230; 4200