Gold Price Forecast: XAU/USD Drops Below $4,600 to Session Lows as US Inflation Supports Dollar

During Tuesday's European trading session, spot gold was trading near $4,582, having briefly rebounded earlier in the day before giving back all gains and falling below the $4,600 round figure. The dollar index consolidating above 99.00, coupled with strong US inflation data released on Wednesday, jointly limited the rebound space for the precious metal.

**Inflation Data and Central Bank Expectations Weigh on Gold Prices**

Recent US inflation data has been hot, reinforcing market expectations that the Federal Reserve will maintain its tightening policy and providing support for the dollar. Meanwhile, ongoing tensions in the Middle East have pushed Brent crude oil prices to near the $110 level. The World Bank has warned that global energy prices could still surge 24% in 2026 even if supply disruptions end by May, intensifying market concerns over the inflation outlook. Against this backdrop, gold's appeal as a non-yielding asset has been suppressed, with high-level volatility or pullback adjustments becoming the dominant short-term theme.

**Technical Picture Suggests Further Downside Risk**

From a technical standpoint, gold has broken below the $4,600 level after repeated consolidation around $4,700, initially completing a pattern shift from rebound to retreat. According to market analysts, last week's weekly candlestick engulfed the prior week's gains, signaling a temporary end to the rebound and indicating a higher probability of continued pullback or high-level sideways trading over the next two weeks. On the daily chart, the 50% retracement level of the current wave from $4,100 to $4,889 stands at $4,495, with Fibonacci support at the $4,400 round figure—both levels representing key technical targets for this pullback.

**Jackson Hole Meeting Becomes Near-Term Focus**

Market attention is shifting to the upcoming Jackson Hole global central bank symposium, with investors awaiting the Federal Reserve Chair's speech for clues on the September rate path. Ahead of the key event, cautious sentiment is likely to continue dominating the market, and any further dollar strength could weigh on gold prices. However, uncertainty over the US fiscal outlook and concerns about the dollar's purchasing power continue to provide medium-to-long-term support for gold as a store of value. According to ING analysis, these factors are enhancing gold's appeal, though the bearish technical picture remains unchanged in the near term.