Gold Vulnerable Ahead of US Inflation Data
Gold Lower on Monday
Gold prices are coming under pressure through early European trading on Monday, with the futures market pulling back further from the 4,785.35 level. The softening n gold prices comes amidst a strengthening wave of risk-on trading as markets continue to cheer the holding US/Iran ceasefire. While no progress has been made in terms of negotiations (Trump rejected the latest peace proposal from Iran), there is a growing view that a China is likely to help deliver a deal via pressure on Iran. Last week, there had been rising speculation that a deal could materialise ahead of Trump’s visit with Xi this week. While that now looks unlikely, the meeting is seen as strengthening the chances of a deal being agreed in coming weeks and should help keep risk appetite strong, weighing on gold demand.
US CPI On Watch
Gold prices are vulnerable to coming under further pressure this week with US inflation data expected to highlight fresh price rises. CPI tomorrow is forecast to rise to 3.76% from 3.3% prior reflecting the ongoing impact of the US/Iran war. If such a jump is confirmed, this will no doubt bring the prospect of Fed tightening into sharper focus, leading to a rebound in USD, weighing on gold prices further. As such, gold prices could end the week sharply lower, particularly if CPI tomorrow comes in above forecasts.
Technical Views
Gold
For now, gold prices remain caught between support at the 4,548.82 level and resistance at 4,785.35. Given the broader pattern of consolidation, further ranging action is likely until we get a clear directional catalyst. Below, 4,389.24 will be the next support to note while any break higher will see bulls targeting 5,113.51 initially.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.