Gold Rebound Supported by Softer US CPI Data, Analysts Say

Gold prices have recovered from levels below 4000 after the release of softer-than-expected US Consumer Price Index (CPI) data, which dampened expectations of further Federal Reserve rate hikes. The weaker inflation print also weighed on the US dollar and short-dated US Treasury yields.

Analysts Sim Moh Siong and Christopher Wong of OCBC noted that the rebound in gold is contingent on continued softness in oil prices and supportive economic data. The precious metal's recovery comes as markets reassess the pace of monetary tightening by the Fed.

Traders are now watching for further economic indicators that could influence the direction of the dollar and yields, which in turn will drive gold's near-term trajectory.