CPI Release Expected to Impact Fed's Interest Rate Decisions

* Wednesday's release of the U.S. Consumer Price Index (CPI) for August is highly anticipated, as it is poised to influence the Federal Reserve's interest rate choices in the upcoming months.

* In preparation for their policy-setting meeting this month, Federal Reserve policymakers have been explicit on two fronts: They are not eager to raise interest rates, yet not all of them are willing to declare a definitive success either.

* A Reuters poll of economists suggests that the European Central Bank will maintain its current interest rates on September 14. However, nearly half of those surveyed anticipate an additional rate hike later this year to combat inflation.

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Wait for entry price

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On Monday, gold prices experienced an increase, buoyed by a decline in the value of the dollar, with investors eagerly anticipating U.S. inflation data that has the potential to shape the Federal Reserve's decisions regarding interest rates.

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ENTRY SELL Wait down

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Spot gold, denoted as GOLD, advanced by 0.3% to reach $1,922.89 per ounce as of 0313 GMT, following a 1% decline in the preceding week. Meanwhile, U.S. gold futures, also represented as GOLD, increased by 0.2% to reach $1,946.30.

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Matt Simpson, a senior analyst at City Index, suggests that if the U.S. dollar continues its downward trend on speculations that the Federal Reserve has concluded its tightening cycle and might consider rate cuts sooner than expected, gold is likely to find support above the $1,900 threshold.

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He mentioned that gold had received backing from its 200-day moving average, a significant technical level that is challenging to breach. He also noted that if U.S. inflation falls short of expectations, it could exert additional downward pressure on the U.S. dollar.

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A 0.3% decline was observed in both the U.S. dollar and the benchmark 10-year bond yields, rendering non-yielding bullion more appealing to international buyers.

According to Tim Waterer, Chief Market Analyst at KCM Trade, "To once more target the $1,950 level, it is probable that the precious metal will need a retracement in yields."