Gold trades sideways as investors await inflation data

Gold continued to trade sideways as investors exercise caution ahead of key inflation data expected tomorrow.

This upcoming data could shed light on the Federal Reserve’s interest rate trajectory, especially after a recent adjustment in the forecast for the first rate cut from September to November.

This shift has adversely affected gold by strengthening the dollar and pushing Treasury yields higher, a situation compounded by the hawkish sentiments expressed by Fed officials.

On the other hand, gold could still find support from strong global demand, mainly driven by the Reserve Bank of India and Chinese investors. Central banks, particularly in Asia, are buying more gold, with the first quarter of this year witnessing record purchases.

Gold prices could also remain elevated on the back of ongoing geopolitical tensions which could fuel demand for safe-haven assets, potentially stabilizing gold’s value over the long term despite current pressures.