Gold Escapes Initial Pressure, CPI Test Awaits
Gold prices erased early losses and were nearly flat on Monday (June 8th) as market sentiment improved after Iran and Israel halted attacks. XAU/USD traded around US$4,332 after briefly touching a daily low of US$4,268, signaling a fragile recovery following last week's significant pressure.
Although regional tensions have temporarily eased, uncertainty remains high due to the lack of a clear outcome from the US-Iran talks. US President Donald Trump called on both sides to "cease fire" and stated that peace negotiations are still ongoing. At the same time, a rally in US equities supported gold, as the positive correlation is said to maintain short-term demand.
The market still carries the scars from last Friday, when a stronger-than-expected Nonfarm Payrolls report triggered a near 5% weekly decline in gold. The data reinforced the narrative that the US job market is quite solid, shifting the Fed's focus back to inflation—a factor that typically puts pressure on non-yielding assets like gold.
This week's main focus is the US CPI release, which is expected to rise 4.2% year-on-year in May, following an already high 3.8% in April. If inflation strengthens again, the market could potentially increase bets on tighter policy, especially as investors have already priced in 24 basis points of Fed tightening through the end of 2026.
From a support/resistance perspective, the DXY is relatively flat at around 100, while the US 10-year yield rose around 2 basis points to 4.552%, limiting bullion's rebound. In energy commodities, WTI rose more than 1%, but if the conflict abates quickly and supplies return to normal, energy prices could potentially fall—which could ease inflationary pressures and open up room for lower interest rates (a typically more favorable environment for gold).
Additional data shows US consumer inflation expectations softened slightly. A New York Fed survey noted that one-year inflation expectations fell from 3.6% to 3.5%, while three- and five-year horizons were unchanged at 3.1% and 3%, respectively. Next on the agenda, the market awaits the ADP Employment Change and US housing data on Tuesday for further guidance. (arl)*
Source: Newsmaker.id
