Odaily Planet Daily reports: CITIC Futures analysis points out that gold is under pressure on one hand due to weakening buying sentiment driven by the impending expiration of the temporary ceasefire agreement between the U.S. and Iran, coupled with uncertain prospects for U.S.-Iran negotiations; on the other hand, it is constrained by remarks during the Walsh hearing emphasizing the Federal Reserve’s independence and low inflation, as well as tighter market expectations for rate cuts amid stronger-than-expected March retail data.
First, according to the official website of the U.S. Senate Committee on Banking, on April 21, nominee for Chair of the Federal Reserve, Walsh, testified before the Senate Banking Committee that, if confirmed and assuming the role of Fed Chair, he would make monetary policy decisions independently, without being influenced by any suggestions or pressure from Trump, emphasizing that low inflation serves as the Fed’s shield.
Second, U.S. retail sales for March rose by 1.7% month-over-month, exceeding the expected 1.4% and the prior value of 0.7%; core retail sales increased by 1.9% month-over-month, surpassing the expected 1.4% and the prior value of 0.7%. Supported by this strong retail data, market expectations for Fed rate cuts have further narrowed.
Third, the U.S.-Iran temporary ceasefire agreement is set to expire on April 22 Eastern Time. Trump publicly stated that it is “highly unlikely” the ceasefire will be extended if no agreement is reached before expiration, while Iran has signaled its refusal to participate in a second round of negotiations with the U.S. Uncertainty over the prospects of talks has led to cautious buying sentiment in gold, with investors holding back and waiting for clarity on the situation. (GoldTen)