The core inflation also fell to 3.1%, which further feeds the speculation that the FED could lower 25 basic points in June, July and October. With inflation cooling, gold remains an attractive alternative to interest -bearing assets.
Trade conflicts increase market uncertainty
In addition to monetary policy, continuous trade tensions have added low uncertainty. The US has imposed a rate of 25% on steel and aluminum imports, which supplied retaliation measures from the European Union and Canada.
- The EU is planning to impose rates next month at $ 28 billion in American goods.
- Canada has placed 25% rates on more than $ 20 billion in American products.
These escalating trade restrictions have more concern about slower global economic growth. As a result, investors have turned to gold as a cover against potential economic disturbances.
Markets are waiting for the American producer price index for the direction
Despite the bullish trend in gold, traders remain careful prior to the report of the US producer Price Index (PPI), which could influence the Federal Reserve policy and influence the US dollar and gold prices.
For the time being, the upward trajectory of Gold will remain intact, supported by the weakening dollar, expectations of lower interest rates and continuous commercial insurities.
Traders look at the resistance level of $ 2,955, because an outbreak could push the prices higher, while a dip under $ 2,930 can indicate a shift in Momentum.