XAU/USD looks to regain $4,200 amid pre-US CPI repositioning

• Gold is stretching higher toward $4,200 on Friday, extending recovery from two-month lows.
• US Dollar eases in tandem with Oil prices and Treasury yields, awaiting US sentiment data.
• The tide seems to be turning in favor of Gold, but the daily RSI is still bearish.

Gold is moving further from the two-month low of $4,067 in Friday’s Asian trading, aiming for the $4,200 level once again amid a continued retreat in the US Dollar (USD) from 18-month highs.

Gold buyers extend control as traders continue to liquidate their USD long positions heading into the long holiday weekend in the United States (US) and bracing for next week’s critical US Consumer Price Index (CPI) data release.

The inflation report will be crucial to determining whether a Federal Reserve (Fed) interest rate hike is fully priced out this month and whether a December rate hike remains on the table.

Beyond the profit-taking pullback in the Greenback, Gold is also capitalizing on a dip in US Treasury bond yields and easing Oil prices, with markets now viewing the bond market crash as excessive.

Oil prices remain pressured by US President Donald Trump’s comments on Iran talks. Trump said Washington was having "productive discussions" with Iran and said no attack was planned before the November 3 midterm congressional elections, squashing media reports suggesting that he was considering an attack before then.

Looking ahead, the end-of-the-week flows, price action in the US Treasury bond yields and Michigan preliminary Consumer Sentiment and Inflation Expectations Index for October could likely have a strong bearing on Gold as it is on course to book the first weekly gain in three weeks.

In the daily chart, XAU/USD trades at $4,174.76, maintaining a bearish near-term bias as spot holds beneath the key moving averages. The 100-day simple moving average (SMA) at $4,259.87, the 50-day SMA at $4,334.80 and the 200-day SMA at $4,529.19 all sit overhead, suggesting that recent rebounds remain corrective within a broader capped structure. The Relative Strength Index (14) around 44 leans slightly negative, hinting that downside pressure persists even as the metal consolidates above prior lows.

On the topside, initial resistance emerges at the 100-day SMA near $4,259.87, followed by the 50-day SMA at $4,334.80, while a more significant barrier is seen at the 200-day SMA around $4,529.19. On the downside, the next key cushion is the rising trend-line support, coming in around $4,001.53; a decisive break under this level would reinforce the bearish tone and open the door for a deeper slide, whereas holding above it keeps the door marginally open for a recovery toward the clustered moving-average resistance band.