Gold Still Unstable, US Inflation Data Keeps Price Below $2,350


Gold traded relatively weak earlier in the week around $2,330 during the opening Asian session. The latest US economic data shows that US inflationary pressures remain strong and reinforces doubts about interest rate cuts by the Fed.

Meanwhile, the US Dollar Index (DXY) fell modestly to 106.00 points and US Treasury bonds yielded lower gains with the 10-year yield falling to 4.667%.

The price of gold is now at $2,325.86 which is a decrease of 0.52% since it opened at the beginning of trading this morning.

Last Friday, the Core Personal Consumption Expenditure (PCE) Price Index report for March was in line with expectations, rising by 0.3%.

Annual inflation reached 2.7% in March from 2.5% in February. Core PCE inflation increased by 2.8% which exceeded expectations of 2.6%.

The market is now targeting a 60% chance for the Fed to cut interest rates at its September meeting. They are also expected to keep the policy rate in the range of 5.25% to 5.5% and have not signaled a cut.

A hawkish stance in market sentiment can reduce the attractiveness of gold and weigh on its price.

Last weekend, Hamas said that it was considering Israel's proposal for a cease-fire in Gaza. It comes as Egypt steps up its attempts to secure an agreement between Israel and Hamas to end the conflict.

In addition, the matter is also to prevent the invasion of the Israeli army to the city of Rafah in the south of Gaza. Any geopolitical upheaval in the Middle East is likely to increase the appeal of traditional safe-haven assets such as gold.