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Gold gained ground on Monday as traders braced for the release of August’s inflation report in the United States (US) and looked for hints that the Federal Reserve (Fed) would cut rates by 50 or 25 basis points. At the time of writing, XAU/USD trades at $2,502, up by 0.23%.Market mood improved during the overnight session for North American traders, as evidenced by solid gains in US equities. US Treasury bond yields retreated somewhat along the short and long end of the curve with the 10-year T-note yielding 3.706% unchanged compared to last Friday’s close.Bullion traders ignored broad US Dollar strength as the Greenback posted gains of over 0.30%, according to the US Dollar Index (DXY), which measures the buck’s performance against six currencies.Meanwhile, traders pared odds for a 50 bps rate cut following last Friday’s Nonfarm Payrolls (NFP) figures, which despite missing the mark showed the Unemployment Rate ticking lower from 4.3% to 4.2%. Now, eyes are on the release of the Consumer Price Index (CPI), which is expected to dip further toward the Fed’s 2% goal.The CME FedWatch Tool shows that the odds for a 25 bps Fed rate cut increased to 73%, while the odds for 50 bps lie at 27%.Sources quoted by Reuters noted, “The market seems to be reconciling that the Fed is probably more likely to do the smaller 25-basis-point cut, and that’s been my position all along.”Earlier, the US economic docket featured the New York Fed inflation expectations report, which showed that prices remain anchored to the 3% threshold, unchanged from the previous survey though slightly above the Fed’s target.

Daily digest market moves: Gold price climbs as traders eye US CPI
 

Technical outlook: Gold price buyers reclaim $2,500
 Gold prices resumed their uptrend above $2,500, though buyers seem to be failing to gather steam with prices below $2,510.Momentum remains bullish, but the yellow metal could consolidate in the short term before resuming its uptrend or turning lower. The Relative Strength Index (RSI) is almost flat, suggesting that neither buyers nor sellers are in charge.If XAU/USD climbs above the year-to-date high at $2,531, that could sponsor a leg-up to challenge $2,550. If surpassed, the next stop would be the psychological $2,600 mark.On the other hand, if Gold prices drop below $2,500, the next support would be the August 22 low at $2,470. If broken, the next demand zone would be the confluence of the May 20 high, which turned into support, and the 50-day Simple Moving Average (SMA) between $2,450 and $2,440.More By This Author:GBP/USD Price Forecast: Drops Below 1.3100 As Fed Large Rate Cut Odds Wane USD/JPY Price Forecast: Downtrend Resumed, Boosted By US Yields FallingGold Price Fell And Ended The Week Below $2,500 Ahead Of US Inflation Data