$4,150 remains a tough nut to crack for Gold as US CPI report looms

• Gold pauses recovery near $4,150 as sellers jump in amid pre-US CPI profit-taking.
• US Dollar licks wounds amid US-Iran optimism and falling Oil prices-led easing inflation concerns.
• Gold reclaimed key 21-day SMA support on the daily chart as RSI flipped bullish.

Gold is pulling back from three-week highs of $4,149 in Asia on Tuesday as traders seem to take profits ahead of critical US Consumer Price Index (CPI) data.

The retreat in Gold is also driven by a pause in the US Dollar (USD) sell-off as markets assess the latest diplomacy efforts between the United States (US) and Iran.

After meeting Qatar's prime minister, Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani, on Monday, US President Donald Trump said: "Iran militarily is effectively over. We're just keeping it the status quo."

Sheikh Al-Thani said he had positive discussions with Trump and Vice President JD Vance on Monday.

These positive developments on the geopolitical front have smashed Oil prices and eased inflation concerns, emerging as the key catalyst behind the Greenback’s sharp correction at the start of the week.

That helped Gold stretch its recovery from yearly lows of $3,870, settling roughly 2% higher on Monday, well past the $4,100 level.

However, Gold is under renewed selling pressure early Tuesday, with traders turning cautious ahead of the US CPI release, one of the important inflation updates before the Federal Reserve’s (Fed) December 8-9 monetary policy meeting.

The headline monthly CPI is seen rising by 0.3% in October, slowing sharply from a 0.6% growth in September. Meanwhile, core CPI, excluding volatile items like food and energy prices, is expected to increase by 0.2% in the same period.

The Bureau of Labor Statistics (BLS) will not publish annual inflation readings amid data disruption caused by last year’s government shutdown.

Therefore, core inflation numbers are more important this time around, particularly as gasoline prices slowed their advance.

Any upside surprise to the monthly CPI and core CPI prints could seal in another December interest rate hike, lifting the US Treasury bond yields and the USD at the expense of non-yielding Gold.

Meanwhile, softer inflation data could push back against expectations for one final hike before the year-end, allowing Gold to extend its recovery.

All in all, the US CPI report will likely determine Gold’s next direction, but thinning liquidity heading into the Veterans Day bond-market holiday could play a pivotal role in post-CPI trades.

In the daily chart, XAU/USD trades at $4,115.14, holding a capped bias as it remains below the 50-day, 100-day and 200-day simple moving averages (SMAs) despite stabilizing over its 21-day SMA. The immediate trend backdrop is still heavy, but the 14-day Relative Strength Index hovering just above 50 hints at tentative recovery momentum as price consolidates after the recent pullback.

On the topside, a dense resistance band emerges around $4,185–4,190, where the 38.2% Fibonacci retracement at $4,185.36 clusters with the 50-day SMA at $4,187.32, followed by the 100-day SMA near $4,201.62 and the 50% retracement at $4,283.11; further up, the 61.8% retracement at $4,380.86 and the 200-day SMA near $4,455.43 guard the broader bearish structure. On the downside, initial support is seen at the 21-day SMA around $4,067.85, reinforced by the 23.6% retracement at $4,064.42, with the Fibonacci anchor low at $3,868.92 acting as a deeper floor if selling pressure resumes.