A stronger-than-expected US core CPI print could lift July rate hike odds above 50%, pressuring gold further.
Gold prices dropped over 3% Monday as renewed US-Iran tensions and hawkish Fed commentary revived inflation concerns. The decline follows the US reimposing a naval blockade and Iran closing the Strait of Hormuz, pushing oil prices higher and stoking rate hike expectations.
Markets now await today’s core CPI month-over-month data, forecast at 0.2%. Fed Governor Waller indicated another upside surprise could prompt a July rate hike, with current odds near 50%. A beat would likely cement a hike, while a miss could ease pressure.
Technically, gold trades near monthly lows, with support at 3,885. A break lower may invite further selling, while buyers could emerge on a pullback toward the downward trendline.