Gold drifts higher to near $4,750 ahead of US CPI inflation release

• Gold price edges higher to near $4,750 in Tuesday’s early Asian session. 

• Traders will closely watch the US April CPI inflation data later on Tuesday. 

• Trump said the US-Iran ceasefire is on ‘massive life support.’

Gold price (XAU/USD) trades in positive territory around $4,750 during the early Asian session on Tuesday. The precious metal edges higher as traders assess developments in the United States (US)-Iran diplomacy and await key US inflation data, which is due later on Tuesday. 

US President Donald Trump over the weekend rejected an Iranian peace proposal, calling it "totally unacceptable." This has fueled uncertainty and kept crude oil prices elevated. Trump said later on Monday that the ceasefire between the two countries was on “life support.”

The US Consumer Price Index (CPI) report for April will be the highlight later in the day. The headline CPI is expected to show a rise of 3.7% YoY in April, compared to 3.3% in March, driven by surging oil prices. The core CPI is projected to show an increase of 2.7% YoY in April, versus 2.6% prior. 

Any signs of hotter inflation in the US could lead to expectations that the US Federal Reserve (Fed) may keep interest rates higher for longer. This, in turn, could lift the US Dollar (USD) and weigh on the USD-denominated commodity price. 

“There is just some bargain hunting coming in and positioning ahead of the U.S. inflation data this week,” said Jim Wyckoff, market analyst at American Gold Exchange.