Gold holds steady near $5,200 ahead of US CPI inflation release

Gold price (XAU/USD) holds steady near $5,190 during the early Asian session on Wednesday. The precious metal steadies after a period of volatility following signals of potential de-escalation in Middle East tensions. 

US President Donald Trump said on Monday that US military operations in Iran would be ending soon but gave no clear timeline for halting attacks that have rattled the Middle East and global markets. His latest comments on the Middle East war dragged oil prices lower and eased inflationary concerns, which provided some support to the yellow metal. 

Traders will closely watch the geopolitical developments in the Middle East. Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that if US and Israeli attacks continue, Iran could block regional oil exports. Meanwhile, US President Donald Trump stated that if Iran does anything that stops the flow of oil through the Strait of Hormuz, it will be hit by the US. Any signs of escalating tensions or a prolonged war in Iran could boost a traditional safe-haven asset such as Gold price. 

The release of the US February Consumer Price Index (CPI) inflation data will take center stage later on Wednesday. The headline CPI is estimated to show an increase of 2.4% YoY in February, while the core CPI is expected to show a rise of 2.5% during the same period. In case of a hotter-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.