Just checked the gold price this morning; it dropped $20 to $4,694. Interestingly, why is gold falling even though the Iran war hasn't ended? Most think that prolonged war = higher gold, but the market is thinking differently.



The real story is that Brent oil surged 4% past $109 after Trump rejected Iran's offer. Expensive oil increases inflation, and that's the problem because high inflation forces the Fed to keep interest rates high for a long time. High interest rates suppress gold prices because gold doesn't pay interest. This is the cycle the market is currently considering, not whether the war will end or not.

Additionally, NFP last Friday came in strong at 115,000 jobs, so the dollar remains strong. This continues to push gold down.

Most importantly, CPI data comes out tomorrow, expected at 3.7%. If it’s hotter than expected, gold prices might plunge further. If it’s cooler than expected, gold could rebound. Also, the Senate will vote on Kevin Warsh as the new Fed Chair this week. Powell's term ends on May 15. The market is not fully prepared for this Fed uncertainty.

Technically, the trend still looks bullish, but it needs to break through the 200-day moving average at $4,711. Have two plans ready: CPI is the key factor today.
NFP-8.83%
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