The gold price (XAU/USD) started trading on the top at around $1,717 after posting its first weekly gain in four weeks. Despite the Fed's hawkish comments, the recent surge in gold could be attributed to a weaker US dollar. The market may have become more bullish due to hopes of overcoming inflation problems.

In contrast to stronger macroeconomic data elsewhere, recent weakness in early inflation data signals from major economies has led market participants to gain confidence that global central banks will be able to contain price pressures. As a result, they can accept restrictive comments/actions from the European Central Bank (ECB) and the US Federal Reserve System (FRS).

Several Fed officials endorsed monetary tightening in their final speeches before the Fed shut down after witnessing the ECB's 0.75% rate hike and Fed Chair Powell's push for more rate hikes.

On Friday, Fed Governor Christopher Waller said he supports another major rate increase in two weeks. As Reuters reported, Kansas City Fed President Esther George said, "It's evidently about canceling a policy." The Cleveland Federal Reserve Bank's President Loretta Mester also said, "The inflation report will not change the outlook." She also predicted rates will rise to over 4% by early 2023.

On Sunday, US Treasury Secretary Janet Yellen told CNN that "inflation will have to be brought down for the Fed to maintain a strong job market." In addition, the politician stated that a reduction in European Union purchases of Russian oil could lead to a sharp increase in gas prices for US consumers in the winter.

The Consumer Price Index (CPI) for the US will be released on Tuesday, and traders may see a lack of momentum in XAU/USD. The metal price may rise further if inflation data for August are weaker than expected. The Fed's chatter and risk catalysts are also important for gold buyers to watch for fresh impetus.

Gold's technical outlook is a bit dismal as the gains have been capped by the 100-period SMA (4-hour chart). The widespread bearish candle suggests further losses. However, the broken trendline and 20-period and 50-period SMAs may lend some support to the metal. 

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