May inflation rises to 4.2% YoY, the highest since April 2023, pressuring gold but sparking technical reversal signals.
Gold prices are eyeing a breakout at $4,242 after May CPI climbed to 4.2% year-on-year, exceeding April’s 3.8% and marking the highest reading since April 2023. The data initially weighed on gold, but a volume reversal at recent lows suggests shifting sentiment as the FOMC meeting approaches.
Analysts note the CPI uptick defied expectations for a modest slowdown, reinforcing concerns over persistent inflation. Gold’s technical setup now hinges on holding above $4,242, a level that could signal further upside if breached.
Markets remain cautious ahead of the Fed’s policy decision, with traders parsing inflation data for clues on rate trajectories.