The gold market experienced a strong decline today, as fears surrounding a wider conflict in the Middle East eased, reducing the need for investors to seek safe-haven assets like gold.
However, geopolitical concerns could remain an important driving force for gold.
Furthermore, market participants are now keenly awaiting a crucial U.S. inflation reading – the Personal Consumption Expenditures (PCE) price index – due later this week.
This data point is expected to provide important cues on the future trajectory of interest rates, which can significantly impact the attractiveness of non-yielding assets like gold.
Ahead of this week’s important economic data releases, including the flash global PMIs and the US Advance Q1 GDP report, traders could remain cautious as stronger-than-expected data could drive gold lower.
Fed officials have also continued to emphasize that interest rates might need to remain elevated for an extended period to bring inflation under control. Hawkish comments could further weigh on gold prices.
