Gold Rebound Endures

After the selloff that transpired following the French election results, gold has gradually inched its way higher, reaching a 2-week high earlier as growing political risks send investors back into haven assets.  Apart from the latest display of North Korea’s nuclear missile power, risk sentiment was also diminished after two anonymous officials reported that President Donald Trump shared classified information with the Russian Foreign Minister in a private meeting in the White House last week.

This led to the dollar index slipping to a 6-month low, supporting precious metals across the board. Investors further embraced caution amid fears that the effects of the "ransomware" cyber attack were far from over. Gold was last seen around $1245.00 per troy ounce, with the area between $1250.00 and $1260.00 representing significant resistance. If bullion prices manage to break above, a rally all the way to $1290.00 is possible.

British consumer prices rose at their fastest pace in close to four years through the 12-months ending in April, underlining a growing squeeze on households as the country begins its exit from the European Union and heads into a general election. Data delivered by the Office for National Statistics on Tuesday showed annualized inflation stood at 2.70% last month, up from 2.30% in March. UK inflation has accelerated in recent months, buoyed by a weakening of the Pound and a rise in crude oil prices, sending the latest CPI print well above economist forecasts of a 2.60% CPI print for the period.

Last week, Bank of England Governor Mark Carney warned that this year could be challenging for consumers as wages are likely to fall in real, inflation-adjusted terms. GBPUSD has since reversed from a weekly low to hover around the 1.2930-mark.