• The XAU/USD should develop sharp movements after the US CPI.
• The price action signaled strong upside pressure.
• The FOMC could be decisive tomorrow.

The gold price came back higher after reaching yesterday’s low of $1.949. Now, it’s located at $1,963 at the time of writing. A weaker greenback helped the XAU/USD to bounce back.

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Today, the fundamentals should be decisive. The United States Consumer Price Index m/m is expected to report a 0.2% growth in May versus 0.4% growth in April. CPI y/y may register a 4.1% growth versus a 4.9% growth in the former reporting period, while Core CPI could report a 0.4% in the last month.

These represent high-impact events and could shake all markets, not only the XAU/USD. In my opinion, higher inflation could boost the USD and send the price of gold down again, as the FED could take action again tomorrow.

As you already know, the FED is expected to keep the Federal Funds Rate at 5.25% in the June meeting. On the contrary, lower inflation should lift the yellow metal.

Earlier today, the UK Claimant Count Change, Unemployment Rate, and Average Hourly Earnings came in better than expected.

In addition, the Eurozone ZEW Economic Sentiment and German ZEW Economic Sentiment indicators also reported better-than-expected figures.

Gold price technical analysis: Choppy price action

As you can see on the hourly chart, XAU/USD moves sideways in the short term. It’s trapped between the median line (ml) and the lower median line (lml) of the ascending pitchfork.

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Its failure to come back to retest the lower median line triggered strong upside pressure. So, the price should hit the median line again.

The $1,969 represents static resistance. Only a valid breakout through the immediate resistance levels may announce further upside.

Jumping and stabilizing above the median line opens the door for a potential rally toward the upper median line (uml).

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