US Data Support
Gold prices are trading a little higher today as traders digest the latest set of US inflation figures, released yesterday. Annualized US CPI was seen falling to 2.9%, down from the prior and expected 3% reading. The release marks the first time that US inflation has been back under the 3% level since 2021 and has seen Fed easing expectations rising accordingly. With the US Dollar turned lower on the back of the data, gold prices look likely to advance near-term with the focus now on a fresh break of current highs. Looking ahead, traders will now be watching US retail sales due tomorrow.
Middle East Impact
Alongside the support derived from increased Fed easing expectations, USD is also being supported through stronger safe-haven inflows. Heightened uncertainty over the conflict in the Middle East as well as an escalation in violence between Ukraine and Russia is driving safe-haven demand for gold. An expected retaliation from Iran against Israel is seen as risking an escalation of violence in the region. With both Iran and Israel saying they are not seeking a war with each other but are prepared for one, markets are highly attuned to the risks linked to such a conflict. Any headlines in coming days relating to a retaliatory attack are likely to see gold prices trading higher on increased safe-haven inflow.
Technical Views
Gold
The rally in gold has stalled for now into the 2,483.27 level. With momentum studies bullish, however, and with price holding above the 2,427.54 level the focus remains on further upside near-term. If we break back below 2,427.54 however, 2,364.93 will be the next support to watch.
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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.