GOLD AT DOWNTREND LINE – CAN CPI CAUSE BULLISH REVERSAL?

Following last week’s sharp decline, gold has started to stabilize after holding the key support area around 3980–4000. On the H2 timeframe, price remains within a short-term descending channel, but bearish momentum has weakened as buyers continue to defend the recent lows. This suggests that a technical recovery could develop if support continues to hold. The market’s primary focus today is the U.S. CPI report, one of the most influential economic releases for the Federal Reserve’s interest rate outlook. Until the data is released, price action is likely to remain cautious and range-bound. A softer-than-expected CPI could weaken the U.S. dollar, allowing gold to break above the descending trendline and extend its recovery toward higher resistance levels. Conversely, stronger inflation data may strengthen the dollar and renew selling pressure on gold. 📍 Key Levels: 🔹 3980 – 4000 Key short-term support and preferred buying area. 🔹 4040 – 4055 First resistance and the descending trendline breakout zone. 🔹 4065 – 4080 Next upside target if bullish momentum is confirmed. 🔹 3940 – 3960 Major support if the bearish scenario resumes. ✅ Preferred Scenario: ✔️ Gold continues holding above 3980–4000, maintaining the current recovery structure. ✔️ A confirmed breakout above the descending trendline would strengthen bullish momentum and open the way toward 4040–4080. ✔️ However, if CPI surprises to the upside and gold loses the current support zone, price could revisit 3940–3960 before attracting fresh buying interest.