Gold prices (XAU/USD) strengthened in the Asian session, recovering from a previous sharp decline and returning to $3,341, surpassing a one-week low. This strengthening occurred as the US dollar struggled to maintain its two-day rally as market participants held back ahead of today's release of US consumer inflation (CPI) data. The CPI data will be a key indicator of expectations for a Federal Reserve interest rate cut, which could influence the US dollar's movement and provide fresh impetus for non-yielding gold.

Ahead of the data release, speculation that the Fed could cut interest rates more than previously expected limited buying interest in the US dollar and became a driving factor for gold prices. However, on the other hand, positive market sentiment triggered by the extension of the US-China trade truce and the planned US-Russia summit to discuss a resolution to the Ukraine war has the potential to limit gold's rise as a safe-haven asset.

Technically, gold's failure to break through the psychological $3,400 level in recent attempts is a signal for XAU/USD investors. This level is now seen as key resistance that must be broken to open the door to a stronger intraday rally. With this combination of fundamental and technical factors, gold's short-term movement will be significantly influenced by the US inflation figures released tonight. (alg)

Source: Newsmaker.id