Gold sits on a key support zone just hours before the September US CPI report. The outcome could decide whether the metal holds the 4,140-4,151 area or slides toward 4,100.
Gold trades at 4,143, inside an order block that now faces its test as the September CPI report lands. The next few hours could shape the metal's direction, according to Investing.com analysis.
What the market expects from CPI
The report is due at 8:30 AM ET today and is the last CPI print before the Fed announces its next decision on October 28. Gold pays no interest, so it usually struggles when rate-hike fears grow and usually gets relief when they fade.
Headline CPI is expected to rise 3.6% year over year in September. Core CPI is expected to edge up to 2.5% from 2.4% in August. Markets price only about a 22% chance of a Fed hike in October, helped by weaker jobs data.
Gold steps lower into support
Gold peaked near 4,217 last week and has moved lower since, with each bounce failing at a lower high. It has now dropped into the order block between roughly 4,140 and 4,151.
Marked liquidity sits above price at 4,170, 4,200 and 4,217, levels buyers need to reclaim to change the picture. If the order block gives way, the next area is around 4,100-4,120.
Three CPI scenarios for gold
A hotter-than-expected reading could push rate-hike bets back up. On the chart, that would likely push gold through the order block, with 4,120 and then 4,100 in play.
An in-line print changes little for the Fed, so gold could chop around the order block, and the analyst would watch whether buyers can push back toward 4,155-4,170. A cooler reading may fade October hike hopes further, which tends to help gold. In that case, a bounce toward 4,170 would be the first step, and a clean close above it would bring 4,200 back into view.
The first spike is often a trap, because gold can jump one way in seconds and reverse right after. A clean hourly close above 4,155 or below 4,140 will say far more than the first candle.
Source: Investing.com
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