Forex
Home›Forex›Major Pairs›Gold holds above $4,000 as traders await US CPI and Wa…
Gold holds above $4,000 as traders await US CPI and Warsh testimony
Gold stays supported above the $4,000 level even as firmer Fed rate-hike expectations and US-Iran tensions keep the dollar pressured.
Gold prices trimmed part of a modest intraday recovery and hovered near a nearly two-week low, but the precious metal maintained a positive bias above the $4,000 psychological level in early European trade, according to FXStreet.
The US dollar inched lower as traders turned cautious ahead of the release of the latest US consumer inflation data and Federal Reserve Chair Kevin Warsh's inaugural congressional testimony. Gold drew some support from that backdrop, but FXStreet noted that rising rate-hike expectations and US-Iran geopolitical risk have limited deeper dollar weakness.
FXStreet said attention later today will center on both headline CPI and, especially, core CPI, which is viewed as a key read on underlying inflation. Separately, the closure of the Strait of Hormuz and US-Iran tensions pushed crude oil to a nearly one-month high, which can reignite inflation fears and raise odds of “higher for longer” US interest rates, a dynamic that can weigh on gold.
The report also pointed to geopolitical developments including a third straight night of US strikes against Iran, follow-on Iranian actions against US facilities, and attacks on two UAE tankers in the strait, which helped traders price in risk premiums favoring the dollar. FXStreet characterized gold’s near-term outlook as potentially vulnerable to further downside toward the year-to-date low near $3,943 to $3,942, with bulls hesitant ahead of key catalysts.
Latest closeGold $4,011.00 ▼2.3%|WTI crude $78.04 ▲9.3%