Gold prices have been seen to have remained flat around the $5,000 level for several weeks due to the impact of investors seeing financial markets move cautiously while indicating that inflationary pressures in the United States are moderating.
At 10 am, gold prices were at $5,026, down 0.33% since it opened in early trading on Monday in the Asian session.
Weaker inflation data continued to strengthen market expectations that the Federal Reserve (Fed) will start cutting interest rates this year. Currently, the market has priced in more than two rate cuts, reflecting confidence that price pressures are easing.
Investors are now focusing on several important economic data that will be released in the near future.
Among the most awaited are the FOMC meeting minutes, the initial estimate of US GDP and PCE inflation data, a key indicator that is often used by the Fed in determining the direction of monetary policy. These data will provide a clearer indication of the appropriate time for the next rate cut.
Meanwhile, geopolitical factors are also a key focus for the market. Traders are monitoring developments in the nuclear talks between the United States and Iran, as well as US-led peace talks to end the conflict in Ukraine.
Both talks are expected to resume on Tuesday and have the potential to have a major impact on global risk sentiment.
Any positive or negative developments in the talks could affect capital flows, particularly demand for safe-haven assets. With global uncertainty still high, investors tend to seek protection from volatile market risks.
Despite recent market volatility, precious metals continue to find support.
Prolonged geopolitical uncertainty, strong buying by central banks and investors’ tendency to shift away from sovereign bonds and currencies are key factors supporting demand for these safe-haven assets.
Overall, the combination of weaker economic data and unresolved geopolitical risks continues to be the main catalysts for global market movements in the near term.
