Gold Prices Hold Above $4,400 After In-Line U.S. Inflation Report

Gold prices held firm above the $4,400 mark on Wednesday as investors assessed a U.S. inflation report that met market expectations, offering few new clues about the Federal Reserve's future interest rate path.

As of 9:26 AM ET, spot gold was up 1.1% at $4,418.08 per ounce, while gold futures rose 0.8% to $4,478.10 per ounce, according to Investing.com data.

Inflation Meets Expectations

The U.S. Labor Department reported that the Consumer Price Index (CPI) rose 3.4% annually in July, a slight moderation from the 3.5% recorded in June. On a monthly basis, the headline CPI increased by 0.1%, rebounding from the prior month's -0.4% reading. Both figures were in line with economists' forecasts.

Core CPI, which excludes volatile food and energy prices, also matched expectations, rising 0.2% month-over-month and 2.5% year-over-year. Following the report, traders see a mixed outlook for the Fed's September meeting. The CME FedWatch Tool indicated a 56% probability that the central bank will hold interest rates steady, with a 44% chance of a 25-basis-point hike.

Geopolitical and Central Bank Support

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The precious metal continued to draw support from persistent geopolitical uncertainty in the Middle East, particularly concerning the Strait of Hormuz. Conflicting reports about a potential U.S.-Iran deal and ongoing attacks on shipping in the region have bolstered gold's appeal as a safe-haven asset.

Meanwhile, institutional demand remains robust. The People's Bank of China expanded its gold reserves for the 21st consecutive month in July, adding approximately 640,000 troy ounces to its holdings. This brings China's total gold reserves to 76.08 million ounces and underscores a strong trend of central bank accumulation.

Technical Outlook

According to Tony Sycamore, a senior market analyst at IG Group, gold is approaching a key technical barrier. He noted a descending trendline resistance level around $4,460, which originates from an all-time high of approximately $5,602 set in late January.

This resistance is further reinforced by the 200-day moving average, currently near $4,495. Sycamore suggested that a sustained break above these levels would be necessary for gold to potentially advance toward the $5,000 psychological mark.