International gold prices experienced a slight pullback during Asian trading hours on Friday, with spot gold consolidating under pressure near $5,120. Earlier, gold had reached a cyclical high driven by safe-haven sentiment. However, as the U.S. dollar index strengthened and U.S. Treasury yields rose, some capital began to exit the precious metals market, leading to a technical correction in gold prices.
From a macroeconomic perspective, the market's current focus is centered on U.S. inflation trends and the future path of interest rates. Investors are awaiting the release of the U.S. Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge closely watched by the Federal Reserve. If the data continues to indicate stubborn inflationary pressures, expectations for "higher-for-longer" interest rates may strengthen further, which would exert downward pressure on gold.
Simultaneously, the situation in the Middle East remains a significant variable for the market. Ongoing regional tensions continue to impact global energy and financial markets. Recent statements from Iran suggest that the crucial energy transit chokepoint, the Strait of Hormuz, may remain closed. This news quickly fueled market concerns about risks to global energy supply. There is a broad consensus that prolonged disruption to shipping through this route could lead to further increases in global energy prices.
Rising energy prices could introduce new inflationary pressures, and escalating inflation often influences the path of monetary policy. If the market perceives that inflation will be slow to recede, the Federal Reserve might be compelled to maintain higher interest rates for an extended period. In such a scenario, the appeal of high-yield assets like U.S. Treasuries would increase, while gold, which offers no interest yield, could face selling pressure.
However, from a safe-haven perspective, gold still holds significant value as a portfolio asset. Historical experience shows that gold often attracts allocation from long-term funds during periods of geopolitical tension. Particularly when uncertainty in global financial markets rises, investors typically increase their gold holdings to hedge against potential risks. Therefore, despite the short-term price correction, underlying safe-haven demand is likely to limit the downside for gold.
From a technical standpoint, daily charts indicate that gold remains within a medium to long-term uptrend. After a rapid ascent following its break above the key psychological level of $5,000, the price has entered a phase of consolidation. Immediate short-term support is situated near $5,050; if this level holds, the bullish structure remains intact. Resistance lies in the $5,150 to $5,200 range. A renewed surge in safe-haven sentiment could provide the momentum for gold to retest this higher zone. Observing the 4-hour chart, gold shows a pattern of oscillation and retreat after its previous rapid advance, with short-term momentum indicators suggesting some weakening in bullish strength. A break below the $5,050 support could lead to a further decline towards the crucial $5,000 psychological level. Conversely, if geopolitical risks escalate, gold prices could stabilize above $5,100 and mount another challenge towards the recent high near $5,200.
Overall, the gold market is currently influenced by a tug-of-war between multiple factors. On one hand, a strong U.S. dollar and expectations for interest rates are applying downward pressure. On the other hand, geopolitical risks and inflation concerns continue to provide support. The future direction will depend on the evolution of U.S. inflation data and global geopolitical developments.