Gold Hovers Near $4,100 Ahead of CPI and Warsh Testimony

Gold is attempting to stabilize after last month’s sharp losses, yet analysts warn that key supports could be tested next week as inflation data challenges the Fed’s tightening bias. Spot gold ended the week at $4,097.86 an ounce, down nearly 2%, amid intensified Middle East fighting that lifted oil prices and stoked inflation concerns. New Fed Chair Kevin Warsh’s focus on price stability has markets pricing in at least one rate hike this year, possibly in September, raising the opportunity cost of holding gold. Economists expect June’s CPI to show a 0.22% monthly drop in headline inflation driven by a 10% gasoline price decline. Philip Streible of Blue Line Futures said weak data could confirm gold’s lows, while Robert Minter of Aberdeen Standard Investments noted institutional clients doubt imminent hikes before elections. Ole Hansen of Saxo Bank maintains the Fed will not raise rates this year, though Monte Safieddine of Capital.com sees gold trapped in a bearish channel with support below $4,000. David Morrison of Trade Nation highlighted an 80% probability of a hike by year-end per CME FedWatch, sustaining pressure on the metal.