- Gold futures remain firm near $5,200 as investors await today’s key US CPI data.
- Cooling energy prices have eased concerns about reflation, keeping hopes of Fed cuts alive.
- Persistent US-Iran tensions continue to provide a floor for gold, with investors focusing on a fresh weekly top.
Gold prices moved slowly in Wednesday’s Asian session as investors waited for important US inflation data and watched as tensions rose in the Middle East. Gold futures struggled to rally further after hitting a one-week high earlier.
The precious metal stayed just around the $5,200 level during the earlier European session. The metal found mild support from a weaker US dollar after crude oil prices fell sharply from recent highs. After the US and Israel attacked Iran, oil prices surged up to over $110 earlier this week. However, prices dropped later when US President Donald Trump said the war might end soon.
Reports that the International Energy Agency suggested a record release of strategic reserves to lower energy prices during the conflict further pressured oil prices. The drop in oil prices helped ease inflationary concerns right away and revived hopes that the Federal Reserve might still cut interest rates later this year.
When the dollar falls, gold usually ticks up, making the dollar-priced metal cheaper for buyers from other countries. Even though energy markets are improving, geopolitical risks remain high. Some of the most intense US-Israeli bombings hit Iran on Tuesday. At the same time, the Islamic Revolutionary Guard Corps said it would expand its operations against US and Israeli technological infrastructure in the region. Gold demand as a safe-haven asset has remained strong amid ongoing uncertainty.
On the other hand, the February US Consumer Price Index report is now the main thing on investors’ minds. It could change how people view the Federal Reserve’s policy path. Economists expect the headline CPI to rise 0.3% MoM and 2.4% YoY. They also anticipate that core inflation, excluding food and energy, could rise by 0.2% MoM and 2.5% YoY.
The markets may not react as strongly, as the February data probably won’t fully reflect the recent rise in oil prices driven by the conflict in the Middle East. Traders are closely monitoring key technical levels in the near future. Gold’s support level is between $5,120 and $5,100. If it stays above $5,200 for a sustained period, it could signal that bullish momentum is back. Gold markets are still in a tug-of-war ahead of the highly anticipated US inflation release, with geopolitical tensions acting as a floor and expectations for interest rates driving macro sentiment.