Just noticed that the gold market is currently in a very hot state. The XAUUSD price is holding at $4,726, but behind the calm price action, a fierce game is unfolding between the S&P 500, which has surged past 7,400 points, and gold, which is still below $5,000. Normally, when stocks rise strongly like this, gold should fall sharply, but it hasn't dropped at all.

The reason is that the market has stopped listening to interest rate talks because JPMorgan and Bank of America clearly state that inflation will remain above 3% for nearly another two years. This means real interest rates are almost zero. Who would want to hold cash? Gold has become the best hedge against inflation.

Another major factor is the Fed, which is about to change its chair from Powell to Warsh this Friday. The vote in the Senate Banking Committee was 13 to 11, indicating nearly half the board opposes Warsh. They fear he might be a White House puppet. This uncertainty has caused institutional investors to pour money into gold for safety beforehand.

Today, the CPI is released at 19:30, with an expectation of 3.7%. If it comes out lower than expected, gold could surge past $4,764 toward $4,800. But if it’s higher, the dollar will temporarily strengthen, and gold might test the support at $4,673, the EMA 50 line. This figure is the real determinant for today. As for the Middle East conflict, it still remains a supporting factor preventing gold from falling sharply.