Gold slides back towards $4300. What's next week's forecasted trading range for XAUUSD?

• XAUUSD traders indulge in profit-taking after tame US CPI sent gold to 2-month high mid-week

• Markets next await FOMC meeting minutes release due Wed, Aug 19th

• Gold may tumble towards $4200 on another spike for oil prices, hawkish FOMC meeting minutes

• Gold may hit $4450 should oil move lower and FOMC meeting minutes further dilute Sept rate hike odds

• Bloomberg model: 73% chance XAUUSD trades between $4213 - $4452 through August 21st.



Gold is set for a weekly drop, despite the mid-week CPI boost.

At the time of writing, the precious metal is down 0.2% for the week, while set for back-to-back daily declines.

Markets are indulging in some profit-taking, after XAUUSD+ briefly hit a 2-month high and flirted with the $4450 level on Wednesday (Aug 12), only to be resisted around its 100-day simple moving average (SMA).

Trade XAUUSD+ now



Why did Gold spike on August 12th?

The US consumer price index (CPI) released mid-week showed that inflation has been rather tame in the world's biggest economy.

^{TAP HERE for our Preview of the US CPI - published Tuesday, Aug 11th.}

This suggested that the Federal Reserve - the world's most important central bank - may not need to hurry and hike US interest rates.

In turn, Fed funds futures duly lowered the odds of a Fed rate hike in September from 52% at the start of this week, now down to 32%.

The odds for a Fed rate hike by end-2026 has also eased slightly from 100% now down to 93%.

NOTES:

• The CPI is a very important piece of economic data released out of the US economy.

• The Fed's primary tool for cooling down inflation is to raise interest rates.

• Gold tends to go up at the thought of US interest rates moving lower/not moving higher.



August 14-21: What's next for Gold?

The US economic calendar appears relatively light for the coming week.

Still, the FOMC meeting minutes, to be released on Wednesday, August 19th, may sway gold prices.

These minutes from the end-July FOMC meeting will show how much Fed officials are contemplating raising its benchmark rates in the months head.

POTENTIAL SCENARIOS

• UPSIDE: Gold could spike back up to a fresh 2-month high above $4450 if the FOMC meeting minutes show that the FOMC is in no rush to raise US interest rates. Should oil prices climb back down and ease inflation fears, that could send XAUUSD towards testing resistance around its 200-day simple moving average (SMA).

• DOWNSIDE: Gold could tumble back to test support around the psychological $4200 level if oil prices spike higher and fan US inflationary pressures, along with "hawkish" signals out of the FOMC meeting minutes that suggest a Fed rate hike is due by end-2026.

Bloomberg's model forecasts a 73% chance that gold will trade between $4213 - $4452 between now and August 21st.





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