Gold Price is testing bearish commitments at the key $1,842 support. As FXStreet’s Dhwani Mehta notes, the all-important US inflation release, which will provide fresh hints on the Fed’s rate hike guidance, holds the key.

Gold could rebound firmly on a surprise drop in the US CPI

“The US Consumer Price Index (CPI) is seen steady at 8.3% YoY in May while the core CPI is seen easing to 5.9% YoY vs. 6.2% previous. Should the inflation print surprise markets to the upside, it could flag rapid and bigger Fed rate hike bets, fuelling a fresh upswing in the dollar at gold’s expense.”

“Gold price could rebound firmly on a surprise drop in the US CPI, reviving the debate of peak inflation and lifting pressure off the Fed to act aggressively in September.”

See – US CPI Preview: Forecasts from eight major banks, inflation peaked but faces challenges to moderate