Disinflation is becoming increasingly prevalent across the Eurozone, with France experiencing a notable reduction in inflation rates. In February, France saw a significant reduction in the regulated electricity price, contributing to the easing of inflation. Despite these developments, prices continue to rise rapidly in the service sectors both in France and across the Eurozone. This persistent inflationary pressure in services is a concerning trend for economic stakeholders.
Meanwhile, gold prices are experiencing a downward drift. The XAU/USD pair, which reflects the gold price against the US dollar, is influenced by several economic factors. Uncertainty surrounding former President Donald Trump’s tariff plans has created a tailwind for the pair, alongside ongoing fears of a trade war. These geopolitical tensions typically bolster gold as a safe-haven asset; however, an uptick in US bond yields has enabled the USD to recover from its multi-month low, applying downward pressure on gold prices.
The economic landscape remains complex and unpredictable. Rising US bond yields have provided support for the USD, allowing it to distance itself from recent lows. This development has implications for various financial markets, including commodities like gold. Although trade war fears continue to support the XAU/USD pair, the strengthening USD presents a counterbalance that contributes to the current drift in gold prices.
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