Gold trades above $1,780, U.S. Consumer Price Index on the agenda

After falling below the all-important $1,780 support level during the Asian session, the price of gold (XAUUSD) has recovered. The yellow metal's sharp drop on Monday was due to the fact that investors are predicting higher interest rate peaks from the Federal Reserve for the coming year. 

It is assumed that the headline inflation rate will decrease to 7.3% from the previous level of 7.7%. These results could set a concrete direction for U.S. monetary policy in the coming months.

If the inflation data turns out to be stronger than expected, the Fed's response could be hawkish. Such measures could strengthen the U.S. currency, and metals markets could feel increased pressure.