Gold rises on safe-haven demand ahead of US inflation data

Singapore – Gold prices edged higher on Wednesday as investors turned to the precious metal for its safe-haven appeal, while a decline in oil prices eased inflation concerns, renewing expectations for possible interest rate cuts by the US Federal Reserve later this year.

As of 05:25 GMT, spot gold was up 0.2 percent at $5,202.10 per ounce. However, US gold futures for April delivery slipped by 0.6 percent to $5,211 per ounce.

The movement in gold prices comes as global markets await the release of the US Consumer Price Index (CPI) data, which is expected to provide further insight into the inflation outlook and the Federal Reserve's future monetary policy decisions.

Oil prices also contributed to the market dynamics, dropping below $90 per barrel. This decline followed reports that the International Energy Agency (IEA) is proposing the largest release of oil reserves in its history in an effort to curb surging prices.

Nikos Kavalis, Singapore managing director of Metals Focus, commented on the situation, stating, “With these (inflation) concerns having eased … hedging and safe-haven attributes (of gold) has once again come to the fore. So, I think from current levels we remain optimistic.”

Meanwhile, geopolitical tensions remain heightened, with the United States and Israel conducting what the Pentagon and Iranian officials described as the most intense airstrikes of the ongoing conflict. Despite these developments, global markets are reportedly betting that former US President Donald Trump will seek to de-escalate the situation.

Investors are closely monitoring these factors as they assess the outlook for gold and other commodities in the context of shifting inflation expectations and ongoing geopolitical risks.