Gold Retreats from Two-Month High; CPI Data in Focus
Gold prices underwent a correction during Tuesday's trading (August 11) after previously breaching US$4,400 per troy ounce—the highest level since early June. Spot gold fell approximately 0.6% to the US$4,363 level, following strong gains in the preceding two sessions.
The earlier gold rally was driven by technical buying after prices broke above the 100-day moving average. Buying interest on price dips and increased capital inflows into gold ETFs in China also supported the price recovery over the past few weeks.
Market focus has now shifted to US CPI data scheduled for release on Wednesday. Consensus estimates suggest a 0.1% month-on-month rise in July CPI, following a 0.4% decline previously. Following weak US labor market data, lower inflation could potentially alleviate the Federal Reserve's concerns regarding price pressures.
However, rising energy prices remain a key risk. US-Iran tensions have escalated again after President Donald Trump issued new demands to Tehran, diminishing the likelihood of the Strait of Hormuz reopening. Sustained high oil prices could maintain inflationary pressure and revive expectations for interest rate hikes.
From a technical perspective, the US$4,350 level is a critical zone for gold. If the price holds above this area, bullish momentum remains intact. Conversely, a failure to maintain this zone could pave the way for consolidation, particularly if the dollar and Treasury yields strengthen again.
Source: Newsmaker.id
