Gold experienced a slight downturn, correcting to around the $5,020 per ounce level and later finding support near $5,000, after a recent surge driven by softer-than-expected US CPI data. A modest US Dollar uptick and a generally positive risk tone contributed to the downward pressure, though geopolitical tensions and dovish Federal Reserve expectations continue to provide underlying support.
- Gold prices fell to around $5,020 per ounce due to profit-taking after a previous 2.5% rise.
- Weaker-than-expected US CPI data fueled expectations of Federal Reserve rate cuts.
- Markets are pricing in slightly more than two Federal Reserve rate cuts this year.
- Investors are awaiting FOMC meeting minutes, US GDP advance estimate, and PCE inflation data.
- US-Iran nuclear talks and US-led negotiations on Ukraine are being monitored for their impact on risk sentiment.
- Geopolitical uncertainty, strong central bank buying, and investor flight from sovereign bonds and currencies support gold prices.
- Gold declined to $4,960 before rebounding, aiming to stabilize above $5,000.
- The US Dollar’s modest uptick and risk-on sentiment exert downward pressure.
- Geopolitical risks, including US-Iran tensions, could act as a tailwind for gold.
- Dovish Federal Reserve expectations benefit the non-yielding yellow metal.
- Softer US consumer inflation figures increased bets on a June rate cut.
- Thin trading volumes due to the Presidents’ Day holiday could limit aggressive directional bets.
- The FOMC meeting minutes and global flash PMIs are key events to watch.
The current market environment suggests a tug-of-war for gold. While immediate pressures from dollar strength and risk appetite may push prices lower, underlying factors provide support. Geopolitical instability and anticipation of looser monetary policy from the Federal Reserve could limit downside risks and potentially drive gold higher as investors seek safe-haven assets and hedges against inflation. Traders should remain vigilant, monitoring upcoming economic data releases and geopolitical developments for clearer signals.