Gold Holds $3,310 as US-China Talks and CPI Data Set the Stage for Volatility

Gold (XAU/USD) Stabilizes at $3,310 Amid Cautious Market Tone

Gold (XAU/USD) is hovering around $3,310 early Monday, attempting to rebound from last week’s sharp 2% drop. A softer US Dollar, fueled by caution ahead of US-China trade talks in London, is providing modest support. Meanwhile, Friday’s robust US Nonfarm Payrolls (NFP) report, with 139,000 new jobs and an unchanged 4.2% unemployment rate, tempered expectations of near-term Fed rate cuts, capping Gold's upside momentum.

US-China Trade Talks and Inflation Data Loom Large for XAU/USD

Investors are bracing for high-level negotiations between the US and China today, following President Trump’s positive call with President Xi. The outcome of these talks could heavily influence market sentiment. A breakdown in discussions may spark safe-haven flows into Gold, while progress could weigh on XAU/USD.

Adding to the mix, US CPI data on Wednesday is projected to show headline inflation rising to 2.5% from 2.3% and core CPI edging up to 2.9% from 2.7%. Higher inflation could complicate the Fed’s path and potentially bolster demand for Gold as a hedge against rising prices.

XAU/USD Technical Picture: Bulls Defend $3,300, But Risks Remain

Technically, Gold is in a corrective phase after breaching its ascending channel last week. The $3,290 level has provided initial support, with bulls now eyeing a retest of $3,340-$3,350 resistance. A break above this zone could pave the way for a move toward $3,400 and potentially $3,425-$3,430.

Conversely, failure to hold $3,300 opens the door for a decline toward $3,283-$3,282 and May’s swing lows near $3,245. Notably, the RSI at 53.50 remains neutral, while the MACD is showing tentative bullish signs. Traders should watch for confirmation before positioning aggressively.

Market Sentiment: Safe-Haven Demand vs. Hawkish Fed Fears

The US Dollar has trimmed gains, with the USD index showing broad weakness against major currencies. This has supported Gold’s intraday recovery. However, the stronger NFP report has dampened Fed rate cut bets, creating a headwind for the non-yielding metal.

Geopolitical risks, including escalating tensions in the Russia-Ukraine conflict and lingering trade uncertainties, continue to underpin safe-haven demand. Should the US-China talks falter, expect XAU/USD to attract fresh bids.

Gold Price Outlook: Critical Levels and Key Catalysts Ahead

Looking ahead, the $3,300 handle remains pivotal. A sustained move above $3,350 would likely trigger a rally toward $3,400 and beyond. Conversely, acceptance below $3,300 could accelerate losses toward $3,245.

With US-China talks, CPI data, and ongoing geopolitical risks in play, volatility is likely to remain elevated this week. Traders should remain nimble, closely tracking these catalysts to gauge Gold’s next directional move.

Verdict: For now, Gold (XAU/USD) is a Hold with a cautious bullish bias above $3,300. Bulls need to reclaim $3,350 to reassert control, while a break below $3,300 would shift focus to $3,245 support.

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