Gold prices held largely steady during European trading on Wednesday as investors digested conflicting developments surrounding the U.S.-Israel conflict with Iran, while also monitoring disruptions in energy markets and the possibility that tensions could ease.
Attention is also turning to U.S. consumer inflation data for February, which may provide further insight into the outlook for the world’s largest economy. However, the figures are unlikely to capture the recent spike in energy costs linked to the Iran conflict.
Spot gold was little changed at $5,194.22 per ounce as of 08:17 ET (12:17 GMT), while gold futures declined 0.8% to $5,202.10 per ounce. The precious metal has experienced significant volatility in recent weeks after retreating from a record level near $5,600 per ounce reached in late January.
Conflicting signals about the conflict in Iran have also contributed to volatile trading this week. U.S. President Donald Trump said late Monday that the war could end soon, but military exchanges between the United States, Israel and Iran continued into the early hours of Wednesday, marking the twelfth consecutive day of hostilities.
Investors are concerned that rising energy costs could push inflation higher and lead central banks to adopt a more hawkish stance. Such a shift could strengthen the U.S. dollar and make gold more expensive for buyers using other currencies.
Focus on upcoming U.S. CPI data
Markets are also awaiting the release of February consumer price index data from the United States later on Wednesday, which may offer clearer signals about inflation trends and the outlook for interest rates.
Economists expect headline CPI inflation to remain unchanged at 2.4% on a yearly basis, while core CPI—which excludes food and energy—is forecast to stay at 2.5%.
Although the report will likely reflect a period before the recent surge in energy prices related to the Iran conflict, it will still be closely analyzed for clues about consumer demand and the broader strength of the U.S. economy.
The inflation data follows a key employment report for February that came in weaker than anticipated, raising concerns that economic momentum in the United States may be slowing.
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