Gold Rises Again, Dollar Weakens After Oil Correction
Gold prices (XAU/USD) strengthened on Tuesday (March 10th) as the US dollar weakened and oil prices fell, reflecting the greenback's close correlation with crude. At the time of writing, XAU/USD was trading around US$5,187 per troy ounce, up more than 0.5%.
Price movements were still dominated by geopolitical factors. US President Donald Trump hinted that US operations in Iran could end soon, fueling speculation of de-escalation and pressuring oil prices. However, the Pentagon called Tuesday the "most intense day" for attacks inside Iran, according to a statement from Secretary of Defense Pete Hegseth, who emphasized that uncertainty remains high even though market sentiment is starting to point to a possible easing of the conflict.
In energy markets, West Texas Intermediate (WTI) reportedly fell about 14% in a day amid speculation that the conflict could soon subside. Meanwhile, the US dollar index (DXY), which measures the dollar's strength against six major currencies, held steady and was last recorded up 0.14% at 98.86.
On the policy front, G7 energy ministers met on Tuesday and agreed to postpone the release of strategic oil reserves, while requesting the International Energy Agency (IEA) to assess the situation before making any further decisions. This decision adds to the market's focus on the balance between supply risks and a coordinated policy response.
On the macro front, market participants are beginning to reduce expectations for aggressive easing from the Federal Reserve amid energy-driven inflationary pressures. The swap market is forecasting a total cut of around 40 basis points by the end of the year. The latest US data shows existing home sales rose 1.7% in February after contracting -5.9% in January, while the ADP Employment Change 4-week average rose to 15.5,000 from 12.8,000 the previous week.
The next focus is the release of US inflation. February's CPI data, scheduled for release on Wednesday, is expected to hold the headline inflation rate at 2.4% (YoY), unchanged from January, while core CPI is projected to remain at 2.5% (YoY). The results of this data will determine the direction of interest rate expectations and further volatility in gold, the dollar, and risk assets.
Source: newsmaker.id
