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Gold edges higher as the US Dollar weakens broadly.
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Caution prevails among investors ahead of the upcoming US CPI release, limiting US Dollar long positions.
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XAU/USD is undergoing a bearish correction from last week's peak at $3,400.
Gold (XAU/USD) is trading higher on Wednesday after a subdued session on Tuesday. Support for the precious metal comes amid skepticism surrounding the recent US-China trade deal framework and investor caution ahead of the US Consumer Price Index (CPI) data release.
The US and China have announced a “framework” aimed at easing trade tensions and returning to the previous Geneva consensus. However, the lack of concrete details has led to doubts about the agreement’s longevity, prompting a muted market response.
Investor focus is now firmly on the upcoming US CPI report, which could reveal the inflationary effects of recent tariffs. A stronger-than-expected reading might stoke concerns over deflationary risks, potentially adding further downward pressure on the US Dollar.
Technical Outlook: XAU/USD in a Bearish Correction Below $3,400
Technically, XAU/USD is still in a corrective phase, consolidating after pulling back from last week’s high at $3,400. Price action remains range-bound within Friday’s trading range, forming “inside days,” while the 4-hour Relative Strength Index (RSI) hovers near the neutral 50 mark—indicating a lack of directional momentum.
An Elliott Wave analysis suggests the pair is in the midst of an A-B-C corrective pattern following the completion of a bullish cycle. The current rebound, likely the B leg of the correction, may attempt to breach the $3,345 resistance and challenge the descending trendline near $3,375 before resuming lower.
Key downside support levels are located at the June 9 low of $3,290, followed by a cluster of previous highs and lows around $3,245, marked by price action on May 15, 19, and 29.
XAU/USD 4-Hour Chart
