Gold rebounds above $3,650 ahead of US PPI inflation report

• Gold edges up above $3,650, close to its record high after near $3,675 seen on Tuesday.
• Traders await the US PPI report, which is expected to show that progress toward the Fed's 2% inflation goal is stalling.
• Technicals continue to show a strong bullish structure, with immediate support at $3,617 followed by $3,556.

Gold (XAU/USD) edges up on Wednesday following a sharp reversal the previous day, with the metal soaring to an all-time high near $3,675 before retreating to settle at around $3,625. At the time of writing, XAU/USD is trading near $3,650, up nearly 0.65% on the day, as traders brace for the US Producer Price Index (PPI) release at 12:30 GMT.

Market attention is squarely on the US inflation data, with August PPI set to offer fresh insight into pricing pressures at the wholesale level.

Economists expect a noticeable slowdown in monthly figures, with both headline and core PPI forecast to rise just 0.3%, down sharply from July's 0.9% unexpected jump. On an annual basis, headline PPI is expected to hold steady at 3.3%, while core PPI is seen easing slightly to 3.5% from 3.7%.

Thursday's Consumer Price Index (CPI) release will provide the final inflation checkpoint before the Federal Reserve's (Fed) monetary policy meeting. Although a rate cut next week is widely expected, these figures will help shape expectations for the pace of easing beyond September.

Overall, Gold continues to draw support from a mix of underlying drivers. A broadly weaker US Dollar (USD) is making precious metals more attractive for overseas buyers. Central banks remain steady in their Gold purchases, reinforcing the metal's role as a strategic asset. Growing trade frictions tied to US tariff policies, combined with persistent geopolitical tensions, are further fueling demand for safe havens. In addition, uncertainty surrounding the Fed's autonomy amid rising political pressure is adding to investor caution, keeping Gold anchored near historic highs.

Gold Market movers: Looking for inflation cues

• The US Dollar Index (DXY), which measures the Greenback's value against a basket of six major peers, is struggling to extend its rebound from seven-week lows. At the time of writing, the index is holding broadly steady around 97.80.
• US Treasury yields are also steady across the curve after Tuesday's mild pullback but remain near multi-month lows. The 10-year note is trading around 4.091%, the 30-year at 4.747%, while the rate-sensitive 2-year yield holds near 3.548%.
• Geopolitical risk remains elevated after Israel carried out an airstrike on Hamas leaders in Doha on Tuesday, killing several officials and a Qatari guard, while Poland intercepted Russian drones that violated its airspace during a large-scale assault on Ukraine in the early hours of Wednesday.
• On Tuesday, the US Supreme Court agreed to an expedited hearing in November to decide whether US President Donald Trump had legal authority to impose sweeping global tariffs. A potential ruling against the measure could force Washington to refund tens of billions of dollars in duties.
• President Trump urged the European Union (EU) on Tuesday to impose tariffs of up to 100% on imports from China and India as part of a broader plan to increase economic pressure on Russia, particularly due to its Oil trade.
• A federal judge has blocked President Trump's attempt to remove Fed Governor Lisa Cook, ruling she can remain in office and vote at next week's FOMC meeting. The court found that the "for cause" removal standard under the Federal Reserve Act only applies to misconduct during a governor's tenure, so the administration's claims were not considered valid grounds for dismissal.

Technical analysis: XAU/USD bulls eye fresh records above $3,675

XAU/USD is extending its bullish structure on the 4-hour chart, carving out a staircase of higher highs and higher lows since bottoming near $3,300 in late August. The latest leg of the rally has lifted the metal into the $3,650 area and propelled it to a fresh all-time high around $3,675.

Price action remains comfortably above the 21-period Simple Moving Average (SMA) at $3,617, which continues to serve as dynamic support, while the 50-period SMA at $3,556 marks a deeper cushion.

Momentum indicators are aligned with the bullish tone. The Relative Strength Index (RSI) is holding above 73, reflecting overbought conditions but also confirming persistent buying pressure, while the Average Directional Index (ADX) above 54 signals a strong trend still in play.

As long as Gold holds above the immediate support near $3,600, the path of least resistance remains upwards, with scope for another run toward fresh record territory.