Gold reclaims $5,000 as US inflation data ignites Fed cut speculation

💡 DMK Insight

Gold’s nearly 2% rebound signals a shift in market sentiment, and here’s why that matters: The softer-than-expected inflation report has traders rethinking the Fed’s interest rate trajectory. If the Fed leans toward rate cuts, it could boost gold further, as lower rates typically diminish the opportunity cost of holding non-yielding assets like gold. Watch for resistance around recent highs, as a sustained move above those levels could attract more buyers. On the flip side, if inflation pressures persist, we might see a quick reversal. Traders should keep an eye on the $1,950 level for potential breakout or breakdown signals. A close above this could indicate a bullish trend, while a drop below $1,900 might trigger profit-taking or stop-loss orders. Also, monitor the broader market for any shifts in risk sentiment, as gold often moves inversely to equities. The next few days will be crucial in determining whether this rebound is a short-term blip or the start of a more sustained rally.