Gold Declines to Near $4,750 as Oil-driven Inflation Worries Weigh Ahead of Us Cpi Data

• Gold price edges lower to around $4,760 in Friday’s early Asian session. 
• Worries that surging oil prices would create inflationary pressures and prevent central banks from cutting rates undermine the Gold price. 
• The US March CPI report will take center stage on Friday.  

Gold price (XAU/USD) trades with mild losses near $4,760 during the early Asian session on Friday. The precious metal declines as market uncertainty persists regarding the fragility of the US-Iran ceasefire and reports of continued Middle East conflict, including the closure of the Strait of Hormuz.

Bloomberg reported on Thursday that Israeli Prime Minister Benjamin Netanyahu is seeking direct talks with Beirut, a day after the worst bombardment of the war killed more than 300 people in Lebanon and placed ‌the US-Iran ceasefire in jeopardy. However, there was no sign Iran was lifting its near-total blockade of the Strait of Hormuz, which has caused the worst-ever disruption to global energy supplies.  

Surging oil prices have heightened energy inflation concerns, which are dampening expectations for interest rate cuts, weighing on the yellow metal. Gold is often used amid geopolitical uncertainty, but it does not yield interest, making it less attractive when interest rates are high.

Traders will closely monitor the release of the US Consumer Price Index (CPI) inflation report for March, which is due later on Friday. The headline CPI is expected to see a rise of 3.3% YoY in March, compared to 2.4% in February, driven by soaring oil prices due to the Middle East war. If the report shows a softer-than-expected outcome, this could drag the US Dollar (USD) lower and lift the USD-denominated commodity price in the near term.