Gold prices eased on Wednesday after a strong rebound in the previous session, as rising oil prices fuelled inflation concerns and created uncertainty over the US Federal Reserve’s interest rate outlook.
Spot gold fell 0.6% to US$4,028.13 per ounce as of 0614 GMT, while US gold futures for August delivery declined 0.9% to US$4,033.90 per ounce.
The precious metal had surged more than 2% on Tuesday to US$4,100.49 per ounce after US consumer inflation data came in softer than expected, raising hopes that the Fed could take a less aggressive approach on interest rates.
However, gold lost momentum as oil prices climbed for a third straight session after US President Donald Trump reinstated a naval blockade on Iranian ports and warned of further action unless Tehran resumed negotiations.
Kelvin Wong, a senior market analyst at OANDA, said, “I reckon that the market is now looking past the CPI data, which is kind of a lagging indication … Trump continues to maintain the blockade of ships that is flowing out of the Strait of Hormuz, causing oil prices to rise and gold to come under pressure.”
Meanwhile, RHB Investment Bank Bhd (RHB Research) maintained its bearish view on COMEX Gold despite the recent recovery, advising traders to retain short positions.
RHB Research said gold’s rebound from the US$4,000 level on Tuesday, where it closed at US$4,069.70 per ounce, confirmed immediate support at that level. However, the metal remains below its 20-day and 50-day simple moving averages, keeping the bearish technical outlook intact.
The research house expects gold to potentially resume its correction towards the US$3,700 level after consolidation, with resistance seen at US$4,200 and US$4,400.
RHB Research recommended maintaining short positions initiated at US$4,605.70, with a stop-loss level at US$4,400.
