The gold price received a much-needed boost yesterday after disappointing data from the US hit the market which cast doubts over the state of the US economy.
CPI figures from America yesterday came in at 0.2 percent which was below expectations for a figure of 0.3 percent an although not disastrous, the news threw into question about how many more rate hikes the Fed will deliver this year which caused a selloff in the US dollar which in turn boosted gold.
The precious metal has been trading between $1,300 and $1,360 since the start of the year and some analysts believe it is going to take something special to force a breakout of this range.
Not even the reintroduction of sanctions on Iran by US President Donald Trump has been enough to drive the gold price significantly higher even though some say it could lead to war.
Gold is “still stuck between $1,300 and $1,360. Clearly, it’s going to take a significant surprise event to knock it out of this range.” said Colin Cieszynski, chief market strategist at SIA Wealth Management Inc.
“Political risk changes related to Iran and North Korea haven’t been able to do it yet, and the recent rally in the U.S. dollar has been unable to do so either. Likewise, the U.S. Treasury yield hasn’t been able to get away from 3.00% in either direction.” He added.
It seems now the market will be watching the release of economic data out of the US very closely over the next month and anymore disappointing news may just be the catalyst for gold to finally break higher as investors scale back expectations for the amount of rate hikes to be delivered from the Fed as the year unfolds.