Gold steadies near peaks as markets eye US CPI and Iran talks

Gold inched higher on Tuesday but failed to push above recent highs, with investors still awaiting concrete progress in US-Iran relations and the release of US consumer price data.

Positive reports emerged on the US-Iran front, boosting risk appetite as expectations for a diplomatic resolution gained traction.

Reports indicated that meetings involving Trump, Vance and the Qatari prime minister were constructive, with discussions focused on advancing negotiations with Iran.

Following his meeting with the Qatari PM, Trump stated that Qatar prefers a peaceful outcome with Iran, though the US is prepared to conduct strikes if required.

It was also reported that Washington permitted a limited uranium enrichment program inside Iran, which Tehran accepted, and a preliminary accord on scaling back enrichment appears close.

On the US CPI front, today's figures could lock in a rate increase at the December Federal Open Market Committee meeting, with traders already assigning an 84% probability to such a move.

A hot reading might trigger a sharp drop in gold, though any losses are likely to be bought back. Rate hikes at this stage would add downward pressure on equities and long-dated Treasury yields amid growth worries, assuming the Iran conflict does not end. A soft report, conversely, should spark an immediate rally on dovish repricing.

In the current environment, if Trump chooses to intensify the war, inflation expectations would climb while the growth outlook weakens, producing a stagflationary scenario that should favour gold. At the same time, a de-escalation would likely prompt a dovish repricing on easing inflation fears, which should also buoy gold over the near term.

GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, gold (CFD contract) continues to consolidate above the broken trendline. Buyers are expected to accumulate near these levels, with risk defined below the trendline, aiming for fresh highs. Sellers, meanwhile, require a break below the major upward trendline to pave the way for lower levels.

GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, a minor support zone sits around the 4,040 level. Any further pullback should see buyers step in at that support, with risk below the minor upward trendline, targeting 4,500. Sellers will seek a break below the upward trendline to extend the pullback toward the major trendline.

GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, another minor upward trendline may act as support. Buyers are likely to rely on that trendline, with risk below it, aiming for 4,500. Sellers look for a break lower to extend the pullback toward 4,040 support. Red lines mark the average daily range for today.

UPCOMING CATALYSTS

Today brings the US CPI report. Thursday features the latest US Jobless Claims figures. Friday closes the week with US PPI data.