I saw the news that gold prices today dropped by $20; the reasons are quite interesting. Most people think the market fears war, but actually, the market is more concerned about inflation. When Trump denied the Iran deal, oil surged over 4%, breaking $109, causing energy prices to stay high, and when energy is expensive, inflation follows.

The gold news to watch is the CPI release tomorrow. The market expects 3.7% annually. If it comes out hotter than expected, the dollar will strengthen, and gold will fall further because the Fed might need to keep interest rates high for a longer time. The Core CPI, which excludes energy, is expected at 2.7%. If this rises too, it means inflation is spreading, not just about oil.

This week, there's another big event: the Senate will vote to confirm Kevin Warsh as the new Fed Chair replacing Powell, whose term ends on May 15. Warsh used to be hawkish on inflation but recently supported rate cuts. If the CPI comes out hot tomorrow, he will have to choose whether to fight inflation or follow Trump’s wishes. This uncertainty is not yet priced into the market.

Looking at the XAUUSD 4-hour chart, gold has been consolidating after rising from $4,521 on April 29 to $4,794. It is currently above the 20 EMA at $4,691 but still below the 200 EMA at $4,711, which is a key resistance level to break. RSI is at 45, leaving room to go higher. MACD shows a bullish crossover, but the histogram is shrinking, indicating momentum is slowing down.

For traders, the simple equation is: if CPI is hotter than expected, gold may drop further; if CPI is cooler, gold may rebound. For short-term trading, wait for the price to dip to around $4,680–$4,695, then look for a reversal candlestick pattern to buy with a stop loss at $4,655 and first take profit at $4,711. For long-term holders, the accumulation zone is $4,650–$4,700. If the price hits $4,665, it’s a good opportunity to buy. Tomorrow’s gold news will decide everything, so prepare two plans well.