On Wednesday, upon evaluating the movements of futures on 1-Hr. Chart: I observed that gold futures, following a soft Consumer Price Index () print earlier in the week, Wednesday’s U.S. Producer Price Index () data also read softer than expected.
Undoubtedly, the data has quelled market anxieties regarding an energy-driven rebound in inflation. Financial markets have aggressively scaled back hawkish bets, with the probability of a July Fed rate hike now pinned at just 10%.
Undoubtedly, investors are bracing for a deluge of data, including June , which will provide the clearest snapshot of consumer spending—the largest driver of the U.S. economy. Concurrently, the latest weekly jobless claims report will hit the wires, serving as an important gauge of labor market strength and employment cooling.
I have already discussed elevated implications with elongated conflict between the US and Iran, while it has reached its 139th day on Thursday in my previous analysis Gold Tests Key Support as Geopolitical Risks Complicate Fed Outlook, gold futures finally nosedived below the key support at $4,030, and heading to test the next key support at $3,955.53 on daily charts.
While on 1-Hr. chart, gold futures nose-dived at 8:00 P.M, despite testing a high at $4,044, and tested the low at $3,995, while the next hourly candle is also signalling extensive bearish pressure below the psychological support at $4,000, signalling prevailing indecisiveness among the traders, and ensuring that the last six candles will be decisive tonight.
The severity of the geopolitical risk premium hit the short end of the U.S. yield curve hardest, directly altering interest rate expectations. The , which is highly sensitive to immediate central bank policy shifts, pressed upward to trade within striking distance of its highest level since February 2025 – 4.2%.
Markets remained focused on the security of the Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas shipments normally pass.
The latest gains followed a fresh wave of U.S. strikes launched on Wednesday against Iranian military targets linked to attacks on commercial shipping.
Washington said the operation was aimed at degrading Iran’s ability to threaten maritime traffic in the Gulf.
Tehran said it was engaged in an “existential war” with the U.S. and warned that regional energy exports could face further disruption if hostilities continue.
The renewed conflict has reversed much of the optimism that followed last month’s temporary easing in tensions.
