Gold prices are currently encountering resistance near the recently tested monthly peak, leading to a slight pullback after a notable gain exceeding 1% the previous day. The prevailing positive sentiment in equity markets is diminishing interest in traditional safe-haven assets like gold, as traders adjust their positions ahead of the imminent release of US inflation data. Despite these factors pressuring the precious metal downward, various supportive elements are expected to cushion gold’s decline and prevent substantial losses.
Investor anxiety persists regarding the potential escalation of conflicts in the Middle East and the prolonged tensions between Russia and Ukraine, influencing market sentiment and curbing overall optimism. Additionally, the dovish outlook on Federal Reserve (Fed) policies is failing to boost the US Dollar (USD), thereby creating a favorable environment for gold, a non-yielding asset.
As such, it is advisable to await clear signs of sustained selling pressure before concluding that the recent positive momentum observed over the past week has dissipated. This cautious stance acknowledges the intricate interplay of factors shaping the current landscape of the gold market.
