[Edaily Reporter Bang Sung Hoon ] International gold prices surpassed $4,400 per ounce (6.23 million won), hitting a two-month high. This surge was driven by buying pressure ahead of the release of inflation data that will help gauge whether the U.S. Federal Reserve (Fed) will raise interest rates.

According to Bloomberg on the 11th, at 8:50 a.m. Singapore time, the spot price of gold was trading at $4,412.80 per ounce (6,248,084 won), up 0.5% from the previous trading day. The intraday gain expanded to as much as 0.7%. This marks the third consecutive day of gains, following a 3.6% rise over the previous two days.

Gold’s break above its 100-day moving average (the average price over the last 100 trading days) the previous day triggered technical buying. This was bolstered by the emergence of bargain hunters who have been buying whenever prices dipped in recent weeks, as well as a massive inflow of funds into gold exchange-traded funds (ETFs) in China.

Heve Chen, an analyst at Vantage Markets, commented, “The various pieces of the gold puzzle are finally starting to fall into place,” adding, “This rebound appears to mark the early stages of a transition into a new phase.” She continued, “More importantly, gold rose even as oil prices and the dollar rose together,” adding, “This means the market is beginning to view gold by a different standard.”

Market attention is shifting to the U.S. Consumer Price Index (CPI) for last month, which will be released on the 12th. According to a Bloomberg survey of economists, the median forecast for the month-over-month increase stands at 0.1%. The consensus is that the index will rebound from the 0.4% decline recorded the previous month. Given the weak employment data released on the 7th, if the pace of inflation remains moderate, the Federal Reserve’s inflation concerns could ease somewhat.

However, if surging energy prices push up inflation, the likelihood of the Fed raising interest rates increases. This could be negative news for non-interest-bearing gold. U.S. President Donald Trump adopted a hardline stance yesterday by presenting a slew of new demands to Iran. Observers note that the possibility of an agreement between the two countries to reopen the Strait of Hormuz and end the conflict that has persisted for months has become even more remote.

Beth Hamack, president of the Federal Reserve Bank of Cleveland, warned that multiple interest rate hikes may be necessary to bring inflation down to the Fed’s 2% target. President Hamack was one of three Fed officials who voted against last month’s decision to keep interest rates unchanged.

Meanwhile, seemingly mindful of allegations that he is attempting to exert direct influence over the Fed, President Trump emphasized that he has had only one “brief” conversation with Fed Chair Kevin Warsh since Warsh took office last May.

Gold prices have recently recovered to the key support level of $4,000 per ounce (5,663,600 won) over the past few weeks. This is due to a resurgence in investment demand driven by increased purchases by central banks around the world. Nevertheless, prices remain about 17% lower than they were before the war in Iran began in late February.

Other precious metals also showed strength. On that day, the price of silver rose 0.2% from the previous day to $65.89 per ounce (93,294 won), while platinum and palladium also rose. The Bloomberg Dollar Spot Index (BBDXY), which tracks the value of the dollar against major currencies, fell 0.1%.