Gold (XAUUSD) remains under pressure despite weak US inflation

XAUUSD quotes are correcting after testing a key resistance level, while market participants assess the impact of slowing US inflation. Prices currently stand at 4,032 USD. Discover more in our analysis for 16 July 2026.

XAUUSD forecast: key takeaways

• Weak inflation data reduced the likelihood of near-term Fed policy tightening
• Investors expect the Federal Reserve to keep its interest rate unchanged at the next meeting
• XAUUSD forecast for 16 July 2026: 3,945

Fundamental analysis

XAUUSD prices are declining after failing to consolidate above the local resistance level at 4,070 USD. Despite persistent geopolitical tensions in the Middle East, gold remains under pressure. One of the factors was the sharp rise in oil prices amid the escalation of the conflict, which has fuelled inflation expectations and curbed demand for the precious metal. At the same time, gold’s losses are being restrained by weaker-than-expected US inflation data, which have reduced the likelihood of imminent Fed policy tightening.

Wednesday’s statistics showed that the US Producer Price Index (PPI) in June unexpectedly declined for the first time in almost a year, primarily due to lower energy prices. A similar signal came a day earlier from consumer inflation. According to the data, annual growth in the Consumer Price Index (CPI) slowed to 3.5% from 4.2% a month earlier, while the consensus forecast had expected a reading of 3.8%. Weaker inflation data increased expectations that price pressures in the US economy are gradually easing.

The change in inflation data immediately affected market participants’ expectations regarding the Fed’s further actions. While the probability of a rate hike at the 29 July meeting was estimated at around 39% before the report’s release, after the data release, it fell to 16%. Investors believe weak readings were recorded across several key inflation components, virtually eliminating the possibility of an imminent rate hike. At the moment, the market’s baseline scenario remains keeping the rate at its current level, which could support gold in the medium term.

Technical outlook

XAUUSD quotes continue to consolidate within a Triangle pattern, remaining below the EMA-65, indicating that sellers have the upper hand. The baseline XAUUSD forecast for today suggests a downward momentum, with the nearest target at 3,945 USD.

Technical indicators confirm the prevailing bearish sentiment. The Stochastic Oscillator is turning upwards from oversold territory, signalling a probable short-term correction towards the pattern’s upper boundary. However, such growth is still seen only as an opportunity for selling to resume. A breakout below the lower boundary of the Triangle pattern, followed by consolidation below the key level of 4,015 USD, would further confirm the downside scenario, increasing the likelihood of continued downward movement.

An alternative scenario will come into play if prices confidently break above the upper boundary of the Triangle pattern and consolidate above 4,070 USD. This signal would indicate that buyers are regaining the initiative, cancel the current bearish scenario, and open the potential for further growth with the nearest target at 4,145 USD.

XAUUSD overview

• Asset: XAUUSD
• Timeframe: M15 (Intraday)
• Trend: downward
• Key resistance levels: 4,045 and 4,095
• Key support levels: 4,020 and 3,995

XAUUSD trading scenarios for today

Main scenario (Sell Stop)

Consolidation below the lower boundary of the Triangle pattern with a breakout of the 4,015 level would create conditions for opening short positions in XAUUSD.

• Take Profit: 3,945
• Stop Loss: 4,025

Alternative scenario (Buy Stop)

A breakout above the upper boundary of the descending channel, with prices consolidating above 4,070, would indicate strengthening bullish momentum and create conditions for growth in XAUUSD prices.

• Take Profit: 4,145
• Stop Loss: 4,060

Risk factors

The main risk to the XAUUSD downside scenario remains growing demand for gold as a safe-haven asset amid a further escalation in geopolitical tensions. Continued expectations of Fed policy easing could provide additional support to buyers, increasing the likelihood of a breakout above the 4,070 USD resistance level.

Summary

In the short term, XAUUSD remains under pressure, as quotes continue to trade below the EMA-65 and remain within the bearish Triangle pattern.

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