Gold price climb on investors renewed Fed easing hopes

• Gold rebounds from weekly low, fueled by hopes for looser Fed policy after weak PPI.
• Focus on upcoming CPI; cooler report could boost chances for rate cuts.
• Potential Trump tariffs pose a risk to inflation, impacting Gold and market sentiment.

Gold prices edged higher on Tuesday after data from the United States (US) showed that prices paid by producers cooled off. This kept traders hopeful for additional monetary policy easing by the US Federal Reserve (Fed). At the time of writing, the XAU/USD trades at $2,675, up 0.46%.

The yellow metal recovered after beginning the week on the back foot, down over 1%. The US Bureau of Labor Statistics (BLS) revealed that the Producer Price Index (PPI) increased but missed estimates for a higher print. This exacerbated Gold's jump as traders grew optimistic that if the Consumer Price Index (CPI) report on Wednesday comes cooler than foreseen, it could increase the Fed's chances of easing policy during the year.

Market participants are eyeing the CPI release on Wednesday. If December prints are below the prior month's 2.7% number, it could indicate that the disinflation process continues. Inflation has risen since October to 2.6%, following September's 2.4% YoY increase.

Traders had priced in 29.4 basis points of easing by the Federal Reserve in 2025. But a cool CPI report could bolster bullion prices.

Earlier, Kansas City Fed President Jeffrey Schmid stated that the Fed would act if Trump's tariffs threw inflation or jobs off course.

In six days, US President-elect Donald Trump will take office. He has threatened to impose universal tariffs, though focused mainly on China, Canada and Mexico. If he goes ahead with this, analysts have mentioned that a trade war could reignite inflation.

Bullion prices are also taking a hit amid good news of a possible deal that could end Gaza's war, according to Reuters, which cited an official briefed on the matter.

In the US, key data releases include consumer inflation figures, Retail Sales and jobless claims for the week ending January 11.

Daily digest market movers: Gold price advances on steady US yields

• Gold price shrugs off higher US real yields, which remain at around 2.34%.
• The US Dollar retreated after the data, with the US Dollar Index (DXY) hitting 109.21, down 0.26%.
• The US 10-year Treasury bond yield remains unchanged at 4.794%.
• The US PPI in December rose 3.3% YoY, below forecasts of 3.4%. Excluding volatile items, the so-called Core PPI expanded by 3.5% YoY, up from November's figures but beneath 3.8% expectations.

XAU/USD technical outlook: Gold price soars above $2,650 as bulls stepped in

Gold price uptrend resumed after a 'bearish engulfing' chart pattern formed, inviting buyers to step in and increase prices. If Bullion clears $2,700, the next resistance would be the December 12 peak of $2,726, followed by the record high at $2,790.

Conversely, if XAU/USD drops below $2,650, the next support would be the 50-day Simple Moving Average (SMA) at $2,643, followed by the 100-day SMA at $2,633.