Gold (XAU/USD) extended its upward momentum for the third consecutive day on Wednesday, climbing from the $2,485 level to reach a fresh weekly high. This steady ascent continued into the early European session, with bulls targeting a break above the $2,525-$2,526 resistance zone. The U.S. Dollar (USD) is struggling to maintain its recent gains and is retreating from its monthly peak, largely due to expectations of a dovish stance from the Federal Reserve (Fed). This retreat has bolstered demand for gold, which benefits from lower yields.
The overall weaker risk sentiment has driven safe-haven flows into gold, pushing its price closer to record highs. However, traders may hold off on further buying ahead of the U.S. Consumer Price Index (CPI) report.
This key inflation data is expected to significantly influence market expectations regarding the Fed’s rate cut decision for September and could determine the next directional move for gold. Despite this, the prevailing trend suggests that gold’s path of least resistance remains upward.
