Gold prices rose at the start of the European session and are currently trading just above $5,000. The precious metal is building on the positive momentum of the previous session, amid mixed signals from safe-haven demand and a strengthening US dollar. Geopolitical turbulence is intensifying after Russia–Ukraine talks failed to deliver any meaningful progress. Meanwhile, tensions in the Middle East are rising, with reports suggesting that a US strike on Iran could be imminent. As a result, demand for gold, the ultimate safe-haven asset, has increased, pushing prices higher. However, for now, the upside remains capped by a resurgent US dollar. The greenback found support after the latest FOMC minutes revealed divisions within the Federal Reserve’s policy committee, with several officials appearing reluctant to cut rates while inflation remains above target. Against this backdrop, traders are turning their attention to the release of US PCE inflation data scheduled for tomorrow. The PCE index is the Fed’s preferred inflation gauge, and any deviation from consensus expectations could reshape the outlook for the central bank’s rate-cutting path, influencing the US dollar and, given the inverse correlation between the two assets, gold as well.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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