Spot Gold held near a 1-week high on Wednesday amid safe-haven demand and as a drop in oil prices curbed inflation fears, reviving expectations for potential rate cuts by the Federal Reserve this year.
Oil prices fell below $90 per barrel, as reports emerged that the International Energy Agency had proposed the most significant release of oil reserves in its history to restrain rising prices.
Meanwhile, traders weighed mixed signals on the US-Israel war with Iran. US President Donald Trump said that the conflict would be resolved “very soon”, while the US military operation in the region was running well ahead of the initial 4 to 5-week estimated timeframe.
Yet, strikes between the US, Israel and Iran hardly showed signs of easing by early Wednesday, as the confrontation entered its twelfth day.
Yesterday the Pentagon announced that the US and Israel had carried out their most intense airstrikes on Iran yet and would continue until the Islamic Republic faces defeat.
Market players now braced for the key US CPI inflation report, which may provide fresh clues over price trends and the Fed’s policy path.
Consensus expectations are for headline CPI to rise by 2.4% year-over-year, while core CPI, which strips out food and energy, is projected to increase by 2.5% over the same period.
Spot Gold was last up 0.01% on the day to trade at $5,192.94 per troy ounce.
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