Gold rises as inflation concerns deepen and tensions persist

US confidence has taken another hit this week as inflation and Middle East tension continue to feed off each other. In the US, consumer sentiment has fallen to deeply pessimistic levels, while inflation has lifted sharply, with March CPI rising 0.9% for the month and 3.3% annually. That combination matters because it tells investors the same uncomfortable story from two directions at once, households are feeling worse, and prices are still moving the wrong way. Markets can usually cope with weak growth or sticky inflation on their own, but when both show up together the tone changes quickly. 

That pressure is not just an American problem. Here in Australia, the Reserve Bank is being pulled in two directions at once. Inflation risk is still very real, particularly with energy costs pushing through the system, but higher rates also add even more pain to households already struggling with mortgages, groceries and fuel. Australia’s labour market has remained fairly resilient, with unemployment steady at 4.3% in March, though consumer sentiment has dropped heavily and recent commentary out of the RBA makes it clear that oil-driven inflation is not something monetary policy can neatly solve on its own. 

Precious metals have responded about the way you would expect in that kind of setting. Gold has held close to one-month highs at around US$4,785 an ounce, supported by safe haven demand and a market that is increasingly doubtful inflation will cool as quickly as central banks would like. Silver has been more volatile, as it often is, but it has still benefited from the broader move into hard assets and from ongoing supply tightness in the market. With weak confidence, softening growth signals and inflation still proving stubborn, both metals have had a solid week. 

Meanwhile, the Strait of Hormuz remains one of the biggest pressure points in the global economy. Oil traders are still treating the situation as fragile, even with ceasefire talk and diplomatic efforts continuing in the background. Reuters reports that around 20% of global oil and LNG flows move through the Strait, and doubts remain over whether negotiations will meaningfully restore stability. A 10-day ceasefire between Israel and Lebanon has now taken effect, but wider US-Iran talks are still uncertain, and markets know that a countdown toward the end of any temporary truce is not the same thing as a lasting resolution. For now, energy markets are still trading on caution, and that keeps inflation risk alive everywhere else. 

Enjoy today’s charts and indicators

Gold Futures Technical Analysis  

Technical indicators for Gold Futures suggest a STRONG BUY on monthly analyses.  

Technical Indicators – Monthly Projections

Gold daily chart, with 50MDA

Silver daily chart, with 50MDA

US500, with 50MDA

ASX200, with 50MDA