Gold is trading around 4,348 USD per troy ounce on Monday, extending its losing streak to three consecutive weekly closes.
With the Federal Reserve gathering this week, attention is focused on the latest US inflation figures. Headline inflation held at 3.4% year-on-year in August, matching forecasts, while monthly CPI rose 0.4% — its sharpest pace in three months.
Core inflation climbed 0.3% month-on-month, the strongest reading since April and above the 0.2% consensus, though the annual core rate eased to 2.4%, its lowest since March 2021.
Earlier producer-price data pointed to rising inflationary pressure, partly driven by higher energy costs amid tensions with Iran, while labour-market indicators suggested employment conditions remain broadly stable.
Following the CPI print, markets have priced in a tighter Fed stance, with the probability of a 25-basis-point hike this week jumping to roughly 90%, up from around 70% beforehand.
This recalibration in rate expectations weighs on gold, as higher yields raise the opportunity cost of holding the non-yielding precious metal.
XAU/USD Technical Analysis
On the H4 chart, XAU/USD completed a consolidation around 4,331, followed by a dip to 4,292 and a rebound toward 4,400.
A fresh leg lower is developing toward 4,300 today, and a breach there could open the door to 4,215 as the bearish trend resumes.
The MACD supports near-term downside momentum, with its signal line below zero and pointing firmly lower.
On the H1 chart, XAU/USD broke below 4,355 and fell to 4,322, with a consolidation zone forming around the former resistance.
A breakdown from this range could push the pair toward 4,300, with the wider bearish bias targeting 4,215.
The Stochastic oscillator backs this view, with its signal line below 50 and slashing downward toward 20, signaling sustained short-term selling pressure.
XAU/USD Outlook
Gold remains under pressure ahead of the Federal Reserve meeting, as stronger-than-expected inflation data have solidified bets on another rate hike.
Technically, the bearish scenario retains control. The immediate target is 4,300, and a confirmed break below could extend declines toward 4,215.