Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

Gold remained in a consolidation range on Wednesday as it faces the influence of geopolitical developments and anticipations surrounding the upcoming US inflation data, which could reshape expectations for Federal Reserve monetary policy and determine the metal’s short-term direction.

Persistent tensions in Eastern Europe and the Middle East sustain the demand for safe-haven assets. However, the surge in oil prices raised concerns about inflationary pressures, pushing up inflation expectations and lifting Treasury yields, which could continue to weigh on gold.

Looking ahead, today’s CPI report is expected to play a crucial role in shaping the near-term outlook. Persistent inflation could reduce expectations for interest rate cuts, with forecasts currently pointing to only one reduction later this year.

Despite inflationary headwinds, sustained central bank accumulation continues to provide a structural floor for gold prices and could help maintain the current bullish trend over the long term.