Gold Rebounds From One-Week Low Amid Depressed USD and Geopolitical Tensions
Gold prices have rebounded from a one-week low of $4,340 after touching that level during the Asian session on Wednesday. The US Dollar (USD) remains depressed due to the Bank of Japan-inspired rally in the Japanese Yen (JPY), which is lending some support to gold.
The Fed hike bets and geopolitical risks are limiting USD losses, capping the bullion ahead of US inflation data. Traders await the release of US inflation figures - the Producer Price Index (PPI) and the Consumer Price Index (CPI) on Thursday and Friday, respectively.
BNY strategists argue that the latest labour market data have firmly re-anchored expectations for further Fed tightening. They note that 'after an exceptionally strong jobs print on Friday, even Governor Christopher Waller's somewhat equivocal comments on Thursday don't seem to be enough to change our view that a rate hike is imminent.'
Escalating US-Iran tensions could help limit deeper losses for the safe-haven USD and cap gold prices. The technical setup suggests that the upside momentum remains fragile and is likely to face immediate resistance at the 38.2% Fibonacci retracement at $4,427.