Gold Prices Stabilize Near $4,400 Threshold Ahead of US Inflation Data
While military activity in the Middle East and Asia supports gold, inflation concerns caused by rising oil prices and the possibility of a Fed interest rate hike limit the rise. Investors are awaiting the US inflation data to be announced at 15:30 TSI.
As the ounce price of gold, sought after by investors seeking a safe haven amid escalating global geopolitical tensions, approaches the $4,400 threshold, markets are locked onto the July inflation data to be announced in the US.
Geopolitical Risks Keep Safe-Haven Demand Alive
In the Middle East, attacks by Yemeni Houthis on maritime shipping and the US military's strike on a container ship heading to an Iranian port have heightened global concerns. Along with the attack on an Egyptian vessel that claimed the lives of four crew members, North Korea's ballistic missile test and military exercise preparations near Taiwan continue to support safe-haven demand for gold.
The $4,400 Threshold in Gold Prices and Oil Pressure
On the third trading day of the week, the ounce price of gold, which rose 0.46% to around $4,387 in Asian markets, is trying to cross the $4,400 threshold. The precious metal, which rose to as high as $4,435 on Tuesday, marking its highest level since June 5, gave back some of its gains due to inflationary pressures brought by rising oil prices. Brent crude rising to $89.60 and US crude to $83.94 keep the possibility of a Fed interest rate hike alive.
Eyes on US July Inflation Data
The most critical development that will determine the direction of the gold market will be the US July consumer inflation, to be announced at 15:30 Turkish time. In the markets, following a 0.4% decline in June, a monthly increase of 0.1% is expected in July, while annual inflation is anticipated to decrease from 3.5% to 3.4%. If the data falls below expectations, gold is projected to establish persistence above $4,400.