Gold prices hit a one-month high yesterday, pushed by demand for a hedge against soaring inflation amid the Russia-Ukraine war, easing pressure from expectations of an aggressive US interest rate hike and a strong dollar.
XAUUSD Spot gold rose 0.5% to 1,977 per ounce, after touching its highest since March 14 at $1,979.95. US gold futures GCv1 were up 0.2% at 1,980.7.
Data showed on Tuesday that US monthly consumer prices surged in March, reinforcing the case for a 50-basis point interest rate hike from the Federal Reserve next month as it seeks to tackle inflation.
Gold is regarded as a hedge against inflation and geopolitical risks. Nevertheless, rising US interest rates would raise the opportunity cost of holding non-yielding bullion and boost the US Dollar in which it is priced. Russian President Vladimir Putin said on Tuesday peace talks with Ukraine had hit a dead end signaling the war could grind on for longer.
Looking forward, the US will publish the all important monthly retail sales and Unemployment Claims.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.