Gold Caught Between Inflation Fears and Safe-Haven Demand

Gold prices remain trapped in a broad consolidation range as markets reassess the inflation outlook following a stronger-than-expected US CPI report.

While geopolitical tensions surrounding Iran and elevated oil prices continue to support safe-haven demand, the latest inflation data has revived concerns that the Federal Reserve could still deliver at least one more 25-basis-point rate hike by the end of 2026.

The hotter CPI print pushed market expectations for another Fed hike closer to 40%, lifting Treasury yields and strengthening the US Dollar — both traditional headwinds for Gold. Rising oil prices are also beginning to feed into broader inflation expectations, increasing fears that Middle East tensions may now be spilling into the wider global economy.

Technically, Gold appears increasingly vulnerable after the 50-day moving average crossed below the 100-day moving average — a development often viewed as an early bearish signal. Prices continue to struggle below the US$4,720–4,800 resistance region, with momentum remaining weak. As of 11:05am Singapore time, Gold Comex futures traded around the US$4,700 level.

Still, Gold’s resilience should not be underestimated. During the 2022 inflation and energy shock, bullion remained relatively supported despite rising rates, as recession fears and surging oil prices boosted demand for defensive assets. A similar dynamic could re-emerge if geopolitical tensions escalate further or global growth weakens sharply.

Earlier this year, Gold surged to record highs on expectations of aggressive rate cuts. However, sentiment shifted after the US attack on Iran reignited inflation concerns and complicated the Fed’s policy outlook.

For now, traders remain caught between sticky inflation, slowing growth risks, and geopolitical uncertainty — leaving Gold without a clear directional catalyst.