Gold Consolidates, Markets Wary of Hormuz and CPI
Gold prices (XAU/USD) rose slightly on Thursday (April 9) amid renewed market caution regarding the resilience of the US-Iran ceasefire. In the US session, gold traded around US$4,766/oz, after briefly breaking through the US$4,800 area the previous day.
Doubts grew after Iranian Parliament Speaker Mohammad Bagher Ghalibaf stated that three parts of the ceasefire agreement had been violated following Israel's attack on Lebanon. Iran maintains that Lebanon is included in the agreement, while the US and Israel maintain the opposite. The market now awaits the first round of US-Iran negotiations in Pakistan later this week, amid President Donald Trump's statement that US troops will remain around Iran until a "real deal" is fully complied with.
On the macro front, the rebound in oil prices after a sharp fall has kept the risk of energy inflation at bay and kept the Fed's policy path "two-pronged." The minutes of the Fed's March meeting highlighted the risk of a weakening labor market if the conflict drags on, which could open up room for cuts, but also emphasized that inflation could remain high for longer if energy prices rebound. Recent US data provided mixed signals: February core PCE rose 0.4% (MoM) and 3.0% (YoY), while Q4 GDP was revised down to 0.5% from 0.7%. The next focus is on Friday's US March CPI to test how quickly the energy shock is filtering through to inflation and interest rate expectations.
Source: Newsmaker.id
