The U.S. July CPI data was released on August 13, showing a modest decline that aligned with market expectations. This outcome prevented any hawkish signals on interest rate hikes, leading the market to significantly lower the probability of a September rate hike by the Federal Reserve. Consequently, the U.S. dollar index and Treasury yields have entered a sideways consolidation pattern.
Following the release of favorable data, short-term funds in the gold market engaged in profit-taking. This, combined with ongoing negotiations over the Middle East geopolitical situation and volatile oil prices affecting inflation expectations, has resulted in a continued balance of power between short-term bullish and bearish forces. The current gold price remains unable to break out into a trending move, officially transitioning into a phase of high-level digestion and consolidation.
The moderate decline in CPI has effectively alleviated market fears of the Fed tightening monetary policy further. The upside potential for real interest rates is now completely capped, which directly reduces the valuation pressure on gold. This is the core reason for the current price's ability to maintain elevated levels. However, since the data perfectly matched expectations without any upside surprises, buying momentum from long positions has remained insufficient. The positive sentiment was partially priced in and absorbed by the market ahead of the release, making it difficult for the data to trigger a new round of significant price surges in the short term.
Looking ahead, attention will shift to the release of the U.S. Producer Price Index (PPI) data. This will serve as a secondary validation of inflation resilience from the upstream supply chain, complementing the CPI data. Additionally, with upcoming public speeches from multiple Fed officials, market expectations for future interest rates will be adjusted accordingly. This increases the likelihood of significant short-term price fluctuations in gold.
From a technical perspective, the overall uptrend on the daily chart remains intact. However, after the recent rapid rally, the gold price has entered a period of high-level horizontal consolidation. The price is steadily trading above short-term moving averages, and the Bollinger Bands maintain an upward opening pattern, indicating a complete medium-term bullish structure. There is no signal of a trend reversal at this point. Yet, the risk of overbought conditions from the continuous rally is gradually emerging. The MACD red histogram is shrinking, signaling a continued decline in bullish momentum. Multiple attempts to break higher have faced selling pressure, and concentrated profit-taking from high-level positions has brought the trending rally to a temporary halt. The market is expected to shift into a phase of repeated range-bound consolidation.
On the 4-hour chart, the upward momentum of price highs is weakening, and the battle between bulls and bears in the short term is intensifying. The price range is narrowing, and various technical indicators are entering a state of inertia. The market is actively waiting for external catalysts to provide direction. The short-term price action is currently in a window of accumulation, poised for a directional decision.
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