Gold rebounds from 1-week lows, remains in range

• XAU/USD rebounded from $1292 back to the $1300 area.
• Price continues to move sideways, without a clear direction.
• US CPI data had no impact, FOMC meeting on its way.

Gold bottomed at $1,293/oz minutes before the release of US inflation data, hitting the lowest level in a week. If found support and following the beginning of the US session rose back to the $1,300 area.

Price reached $1,299 and it was holding near that level, moving in the range of the last five trading days. Price was being unable to rally above $1,300 while at the same time, supported by $1,295.

Today’s bounce from the lows took place as US yields moved off daily highs and while the US Dollar Index remains near lows despite CPI data. The CPI reached 2.8% (highest in six years) and the core 2.2%.  

“We expect to see core CPI continue to run a bit above 2 percent in the coming months. Core PCE, which is more closely watched by the Fed, should also move higher, reaching the FOMC’s target of 2.0 percent as soon as the third quarter. That should pave the way for the Fed to raise rates not only at the end of tomorrow’s meeting but twice more in the second half of the year”, said analysts at Wells Fargo.

Inflation data had a limited impact. Market participants appear to focus on the FOMC meeting that started today. Tomorrow at 18:00 GMT the statement will be released.

XAU/USD Short-term Levels to watch

To the upside, resistance levels might be located at $1,303, $1,307 and $1,318. On the flip side immediate support lies at $1,292 followed by $1,288 and $1,282.