Safe-Haven Flows Supporting Gold
The rally in gold prices this week has stalled for now ahead of US inflation data coming this afternoon. Trump’s U-turn on tariffs yesterday has fuelled a recovery rally in risk assets with markets cheering the 90-day pause on tariffs for many countries. However, with the US/China trade war still raging, uncertainty remains high and gold looks likely to retain a residual safe-haven bid going forward, despite the recovery in equities and commodities. Trump’s unpredictable policy handling has raised further questions over the health of the US economy under his leadership and with USD falling today, gold prices are likely to remain underpinned.
US Inflation Due
Looking ahead today, gold traders will be watching the latest US inflation data today. If a further cooling in CPI is seen, as per the forecasts, this should keep USD pressured lower near-term allowing gold room to continue higher. However, even if we see a higher print today, gold prices look likely to continue higher into next week given the backdrop of heightened inflation fears around the US trade war. The FOMC minutes yesterday revealed that policymakers all agreed that the US was facing economic risks due to slower growth and upward inflation risks linked to the trade war. As such, if we start to see evidence of upward inflation risks coming through, this should drive fresh buying in gold.
Technical Views
Gold
With the bull channel lows holding and momentum studies turning higher, focus is on a continuation higher and an eventual breakout above 3,193.77 while price holds above the 2,949.88 level. Below there, 2,859.15 is 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.