The Consumer Price Index (CPI) figures, due later in the North American session, are expected to provide fresh guidance on the U.S. central bank’s monetary policy outlook. The data will also impact the U.S. Dollar (USD), which in turn will drive demand for gold, a non-yielding safe-haven asset.
Adding to market uncertainty, a federal appeals court ruled this week that former President Donald Trump’s controversial “Liberation Day” tariffs may remain in place temporarily. The decision followed a lower court’s ruling last month that deemed the tariffs unlawfully enacted. The renewed trade tension, along with persistent geopolitical risks, is offering support to gold prices.
Geopolitical Tensions and Fed Outlook Support Gold
The global risk landscape remains tense. Russia has resumed airstrikes on the northeastern Ukrainian city of Kharkiv after refusing an unconditional ceasefire earlier this month. Meanwhile, Israeli military operations continue in the Gaza Strip, contributing to elevated geopolitical stress and sustained safe-haven flows into gold.
On the economic front, a stronger-than-expected U.S. Nonfarm Payrolls report released last Friday reinforced the strength of the U.S. labor market. The data led investors to scale back expectations for an imminent rate cut, although markets are still pricing in the likelihood of two reductions before the end of 2025.
Despite the upbeat labor market data, the U.S. Dollar remains constrained within a narrow range, hovering just above its lowest level since April 22. Investors remain focused on upcoming inflation indicators, including Thursday’s release of the U.S. Producer Price Index (PPI), which could further shape near-term currency and commodity market sentiment.
Technical Outlook: Gold Eyes Resistance Near $3,352
Analysts note that gold prices face a key technical hurdle in the $3,352–$3,353 zone. A decisive break above this resistance could pave the way for further gains, especially if inflation data supports a dovish Fed outlook.
Until then, the combination of ongoing geopolitical unrest, trade policy uncertainty, and cautious optimism around Federal Reserve rate cuts continues to provide a supportive backdrop for gold.
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