Gold Maintains High Position, Conflict in Rafah & US Inflation Continues to Be Observed by the Market!


Gold extended its gains above $2,370 at last Friday's close and held its position close during Asian trading hours today.

Rising geopolitical tensions in the Middle East continue to increase safe flows and leverage of the precious yellow metal.

This week, the US Consumer Price Index (CPI), Producer Price Index (PPI) and Retail Sales will be the focus of attention in price changes as well as displaying several indicators regarding the economy and the trajectory of inflation.

Meanwhile, the price of gold is now at $2,358.48 which is down by 0.8% since it opened this morning.

Previously, some US Federal Reserve (Fed) officials delivered their statements with a hawkish tone.

Atlanta Fed President Raphael Bostic said that the move to cut interest rates for 2024 is not justified. It is caused by the increase in inflation since the beginning of the year.

Minneapolis Fed Neel Kashkari said they are now in a wait-and-see position regarding monetary policy and important economic data in the future.

In addition, consumer sentiment in the US also fell sharply in May to the lowest level in six months at a time when inflation was rising.

The University of Michigan Consumer Index report showed a decline to 67.4 for May from April's reading of 77.2. It is still below the market consensus of 76.0.

The final reading of US CPI inflation for April is expected to decrease to an annualized 3.4% compared to the previous reading of 3.5%. Hotter-than-expected data may dampen hopes for an interest rate cut and drag gold prices higher.

Looking towards the Middle East conflict, the Israeli army launched an operation in northern Gaza overnight and felt it was a right action near the Rafah border. Their invasion of that small area was a preparation before a full-scale extermination.

Ongoing geopolitical tensions in the Middle East are likely to boost prices of precious metals as well as traditional safe-haven assets.