Gold Forecast: XAU/USD Holds Firm Ahead of U.S. CPI Data

Over recent trading sessions, stability has become an increasingly important characteristic of gold's price action. Since the beginning of last week, the metal has gained more than 5.0%, reflecting that buying pressure has remained relatively consistent in the short term.

What stands out is that this recovery has been sustained during a week marked by major economic and political events, including the U.S. midterm elections, the sharp selloff in the U.S. equity market and the release of the latest NFP employment report. This behavior suggests that gold has begun to regain some of its appeal as a safe-haven asset at a time when uncertainty is once again becoming a dominant theme across financial markets. However, investors are still awaiting the release of the latest U.S. CPI inflation data tomorrow, an event that could prove decisive in determining whether the current buying momentum can be maintained or whether competing markets such as bonds regain investors' attention.

Is Gold Regaining Its Safe-Haven Status?

Last week was marked by several economic and political events that generated important shifts in overall market confidence. The first was the U.S. midterm election result, which delivered a Democratic victory. This outcome reignited concerns about the possibility of stricter regulation across sectors such as artificial intelligence, a development that contributed to a significant wave of selling pressure in U.S. equities toward the end of the week.

In fact, the Fear & Greed Index moved back into extreme fear territory, highlighting a notable deterioration in investor risk sentiment. This was followed by the release of the latest NFP report, which showed the creation of 165,000 jobs during October, well above expectations and reinforcing expectations for a potentially more aggressive Federal Reserve into year-end.

Despite these developments, gold's reaction has been particularly noteworthy. In recent sessions, the metal has managed to maintain a relatively stable performance and has even shown signs of recovering demand. Futures market activity reflects this trend, with trading volume exceeding 220,000 contracts during the final days of last week, moving above the average levels observed during the last week of October and signaling strong participation despite elevated uncertainty.

Perhaps the most important development, however, has been the rise in Open Interest, the indicator that tracks the total number of outstanding positions in the market. By the end of last week, Open Interest had moved above 400,000 contracts, coinciding with the recent recovery in gold prices and suggesting that demand has begun to stabilize in the short term.

This is particularly relevant because such a consistent recovery in buying activity had not been observed for several weeks. More importantly, it has occurred during a period when uncertainty has once again started to dominate financial markets, potentially signaling that gold is gradually recovering part of its traditional safe-haven appeal, a characteristic that largely faded throughout much of 2026.

Source: CME

Even so, one major event still lies ahead: the release of the latest U.S. CPI inflation data. This report could prove critical in determining whether the recent perception of a more aggressive Federal Reserve remains intact in the months ahead. The data could also influence Treasury yields, one of gold's main competing markets and a key benchmark for assessing the strength of demand for the precious metal.

For now, markets expect annual inflation (CPI YoY) to rise to around 3.9%, up from the previous 3.7% reading. The importance of this release lies in its potential impact on expectations surrounding future Fed policy. Following last Friday's stronger-than-expected labor market data, investors remain focused on the possibility of higher interest rates for longer.

This relationship matters because much of the recent behavior in the bond market has been driven by expectations for U.S. monetary policy. Bonds remain one of gold's main alternative assets because they offer periodic yields and typically become more attractive when interest rates move higher.

In fact, the recent moderation in the 10-year U.S. Treasury yield, which has once again moved below the 5.00% area, has coincided with a relatively consistent improvement in confidence around gold. This relationship suggests that as long as yields continue to show signs of easing, the metal may continue recovering part of the demand lost earlier in the year.

For this reason, tomorrow's inflation data could represent an important inflection point. If the report reinforces expectations for a more aggressive Federal Reserve and leads to a renewed increase in bond yields, part of gold's recent recovery could begin to face resistance. On the other hand, if yields fail to regain momentum, the bullish bias around XAU/USD could remain relevant over the coming sessions.

Source: TradingEconomics

With all of this in mind, gold has managed to regain an important degree of investor confidence at a time when uncertainty has once again become more prominent across financial markets. However, the metal remains sensitive to developments in competing markets such as bonds. As a result, tomorrow's inflation report could become a key catalyst in determining whether the recent recovery continues to build momentum or whether a renewed phase of indecision emerges around XAU/USD.

 

Gold Technical Forecast

Source: StoneX, Tradingview

• Bullish momentum is beginning to gain relevance: Although a major long-term bearish trendline has dominated gold's daily chart over recent months, the recent recovery has started to reduce seller dominance and has pushed price back toward important technical levels. If buying pressure continues to build and begins breaking key resistance areas, this dynamic could place the broader bearish structure at risk and open the door to a more meaningful recovery in the weeks ahead.
   

• RSI: The RSI remains close to the 50 neutral level, reflecting a relatively balanced environment in terms of market momentum. Unless the indicator begins moving decisively away from this area, a broader phase of indecision could continue to play an important role in gold's price action.
   

• MACD: A similar picture can be seen in the MACD, whose histogram continues to fluctuate near the 0 neutral line. This reading also supports the view that the market remains in a relatively balanced environment where a dominant directional bias has yet to emerge.
   

Key Levels to Watch:

• $4,200 – Key Resistance: An important upside barrier that coincides with the 50-period simple moving average and an area near the Ichimoku Cloud. Price action returning toward this level could challenge the prevailing bearish structure and open room for a more consistent recovery in the weeks ahead.
   

• $4,000 – Near-Term Barrier: An important retracement area observed during previous weeks that also coincides with a key psychological level. A sustained return toward this area could signal a more neutral market environment and support a broader phase of indecision.
   

• $3,885 – Critical Support: A low not seen since October 2025 and currently the most important downside barrier on the chart. Price action consolidating below this level could reinforce seller dominance and create room for a more aggressive bearish trend in the weeks ahead.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25