Gold is currently stuck in a high-level consolidation. Whether it moves up or down depends entirely on the December US CPI data. Simply put, trading is about finding certainty amid uncertainty, and this CPI report is the key to breaking the current stalemate in gold.

**The CPI line determines the short-term direction**

The December unadjusted YoY CPI pre-forecast and consensus are both 2.70%, with a MoM seasonally adjusted expectation of 0.30%. Once this data is released, market reactions will be straightforward:

- If the data exceeds expectations, inflation remains sticky, and the market will lower expectations for Fed rate cuts. The dollar will strengthen, and gold will likely retreat, reducing bullish opportunities.

- If the data is below expectations, rate cut expectations will heat up immediately, the dollar will weaken, and gold may break through the current range, possibly reaching new highs.

If the data aligns with expectations, it will be awkward — the market will lack consensus, and gold will continue to oscillate at high levels until upcoming non-farm payroll data or Fed meeting minutes set the tone.

Currently, gold is in a tug-of-war between profit-taking and new longs. The CPI is the variable that could break this balance.

**Technical outlook: key levels to watch**

Looking at the 4-hour chart, gold reached 4630.21 before pulling back. It’s now fluctuating around 4583, with a broad consolidation range between 4493 and 4630.

Support levels downward:
- 4493.57 is the middle band of the Bollinger Bands; holding here gives bulls the strength to push higher.
- Next, the strong support at 4356.93; if broken, the short-term bullish trend will be over.

Resistance levels upward:
- 4630.21 is the recent high; a successful breakout here could target 4700.

The MACD shows a bearish divergence, and the upper Bollinger Band has flattened, indicating short-term upward momentum is waning. Everyone is waiting for a clear signal to break the current deadlock.

**Trading strategy**

Before the CPI data release, consider trading within the 4470–4600 range — buy low, sell high, avoid reckless moves.

After the data:
- If it breaks above 4630, go long with targets around 4650–4700.
- If it breaks below 4570, go short with targets around 4550–4500.

The key is to wait for this data, as it will tell us where gold is headed next.