XAU – Gold Consolidates at High Levels Awaiting Change; Focus on Tonight's US CPI

The situation in the Middle East remains volatile. In response to Iran's proposed peace agreement conditions, U.S. President Trump explicitly demanded that Iran pay compensation for victims of the war, attacks, and protests. Meanwhile, Mohsen Rezaei, the newly appointed Secretary-General of Iran's Supreme National Security Council, stated on Tuesday that the Strait of Hormuz will remain closed as long as the US does not change its behavior and accept Iran's proposed conditions for ending the war. This statement is considered the clearest signal to date, indicating that even if negotiations progress, shipping through the strait may not resume quickly. Shipping data shows that the number of ships passing through the Strait of Hormuz on Monday had dropped to six, far below the daily average of about 11 over the past 10 days, and far below the pre-war normal of 125 to 140 ships per day.

Gold prices adjusted slightly after hitting a more than two-month high of $4435, briefly falling to $4356, but rebounded to the $4400 mark in early trading on Wednesday. Last week's unexpectedly weak non-farm payroll data significantly reduced expectations of a September rate hike, providing support for gold. On the other hand, the fluctuating situation in the Middle East, particularly the uncertainties surrounding the Strait of Hormuz, limited the upside potential for gold. If the recovery in energy prices continues, it could boost overall inflation expectations, increasing the likelihood of a Fed rate hike. According to the CME FedWatch Tool, traders are currently pricing in a 50% probability of a September rate hike, a slight decrease from previous levels, while the probability of a December rate hike remains as high as 80%. Investors are awaiting the US Consumer Price Index (CPI) release on Wednesday evening, which could significantly influence market repricing regarding the Fed's policy path. A slower CPI growth rate is expected to continue supporting gold.

Gold's clear breakout from the triangle pattern last week triggered technical buying, fueling the price rally. With the technical pattern broken and the chart showing the 9-day moving average crossing above the 25-day moving average, gold is expected to maintain its upward trend in the short to medium term, with the psychological level of $4500 attracting significant market attention. If gold prices can break above and hold above $4,349, they could challenge the resistance levels at $4,471 and $4,548, with sufficient strength to extend to $4,591. Given last week's breakout from a sensitive five-month triangle pattern and descending channel, the upward-measured challenge levels are $4,488 and $4,741. Additionally, there is another descending channel resistance at $4,588; if this channel is broken, the next resistance level is at $5,138, which will form another sideways channel.

Short-term resistance is forecasted at $4,394 and $4,407, with further targets at $4,433 and $4,461. Support levels are expected at $4,354 and $4,329, followed by support at $4,304 and $4,264.

London Gold Price Schedule, August 12:
Forecast Early Range: 4354 – 4394
Resistance: 4407 – 4433 – 4461
Support: 4329 – 4304 – 4264

SPDR Gold Trust Holdings:
August 3 – 1,005.87 tons
August 4 – 1,009.3 tons
August 5 – 1,014.15 tons
August 6 – 1,014.72 tons
August 7 – 1,017.54 tons
August 10 – 1,020.96 tons
August 11 – 1,022.67 tons

11/8 AM London Gold Fix: $4372.2 
11/8 PM London Gold Fix: $4383.35 

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