Gold: Sideways movement expected ahead of US CPI – DBS

Gold Market Trends: Institutional Activity and Geopolitical Influences

According to DBS Group Research economist Eugene Leow, gold prices have remained stable within a narrow band, even as energy markets experience significant fluctuations. Investors are closely monitoring upcoming US CPI figures, which are expected to play a pivotal role in market direction. The analysis points to increased institutional interest, reflected in a steady rise in ETF holdings following a dip at the end of March. Ongoing tensions in the Middle East and forthcoming US economic data continue to be major factors influencing gold's performance.

Rising Institutional Interest and Geopolitical Uncertainty

• Gold prices have remained largely unchanged overnight, showing limited movement despite considerable volatility in the energy sector.
• Concerns about the sustainability of the ceasefire in the Middle East, along with disruptions to commercial shipping through the Strait of Hormuz, have driven oil prices closer to the $100 mark.
• Despite these developments, real yields have stayed stable, with investors adopting a cautious approach ahead of the crucial US CPI announcement.
• Institutional investors have shown a marked increase in demand for gold over the past week.
• ETF holdings are on the rise, as institutions take advantage of recent price softness to build strategic positions. In the short term, market attention will be on upcoming US-Iran talks and whether shipping activity returns to normal soon.

This article was produced with assistance from an AI tool and reviewed by an editor.