$4,100 reclaimed: Will Gold buyers succeed ahead of US inflation test?

• Gold starts the US CPI inflation week with a strong rebound, reclaiming $4,100.
• US Dollar retreats amid reduced Iran risks, lower Oil prices and trade optimism.
• The daily chart shows that the tide seems to have turned in favor of Gold buyers.

Gold is back above the $4,100 mark, kicking off a big week on Monday with a strong rebound. However, it remains to be seen whether the bright metal sustains another attempt above that level ahead of critical US Consumer Price Index (CPI) data due on Tuesday.

Gold has reversed losses incurred on Friday after the blockbuster US labor market report, which showed that Nonfarm Payrolls (NFP) increased 165,000 in October, blowing past expectations for a 65,000 gain, while the Unemployment Rate fell to 4.1%.

The US Dollar (USD) jumped alongside the US Treasury yields as the robust US employment data ramped up the odds for a December Federal Reserve (Fed) interest rate hike to about 80%, where it now wavers, according to the CME Group’s FedWatch Tool.

However, in Monday’s trading so far, the Greenback is retreating as reduced US-Iran geopolitical tensions drag Oil prices lower and ease inflation concerns. US President Donald Trump said on Sunday that ‌he was highly unlikely to order fresh attacks on ​Iran as long ​as talks to end the conflict ⁠progress.

Additionally, renewed US-China trade optimism provides the much-needed lift to the markets, weighing on the USD while aiding the Gold price recovery.

China’s Finance Ministry said on Monday that it will extend the suspension of an additional 24% tariff on imports from the United States (US) for two months, effective November 10, building on the truce between the two countries.

“Separately, gold demand in India picked up at the start of a key festival on Friday as prices slid to a seven-month low, drawing back bargain hunters who stayed on the sidelines for months waiting for a correction,” per Reuters.

Despite the impressive bounce in Gold, traders remain sceptical ahead of the US inflation release, which could check further recovery.

A surprise uptick in the underlying US CPI inflation numbers could seal in a December Fed rate hike, reviving the bearish sentiment around Gold. Higher rates increase the opportunity cost of holding non-yielding assets such as bullion.

In the daily chart, XAU/USD trades at $4,121.77, keeping a capped tone as spot holds below the medium- and long-term moving averages. The 50-day simple moving average (SMA) at $4,191.19 and the 100-day SMA at $4,201.38 both sit overhead, suggesting that rallies remain vulnerable while the broader trend stays under the 200-day SMA near $4,458.02. The 14-day Relative Strength Index around 52 hints at mildly improving momentum, but with price still below these key averages, bullish attempts are constrained.

On the topside, initial resistance is seen at the 50-day SMA at $4,191.19, followed by the 100-day SMA at $4,201.38, with the 200-day SMA at $4,458.02 reinforcing a higher structural barrier. On the downside, immediate support is offered by the 21-day SMA around $4,069.59, and a daily close below this level would likely open the way for a deeper pullback despite the currently neutral-to-positive RSI profile.