Gold rises on geopolitical tensions but investment demand remains weak
Gold, reeling under hotter than expected December US CPI inflation data released on Thursday, caught a bid Friday as the US and the UK launched airstrikes on Iran-backed Houthis' targets in Yemen to stop shipping attacks in the Red Sea. In a reaction, the Yemeni Group vowed to retaliate with an urgent response in the form of a move that intends to target all US and UK interests alongside those linked to Israel.
The strike by the US and UK, which included more than 70 airstrikes on Yemen targets, risks spreading fallout from Israel-Hamas war, which, in the worst-case scenario, can drag in other regional powers more directly. It is to be noted that earlier in the week, Houthis launched their biggest shipping attacks and Iran seized an oil tanker off the Coast of Oman. The US government has not ruled out more strikes on the Houthis targets.
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The US PPI for final demand decreased 0.10% (forecast 0.1% increase) for a third consecutive month, while Core PPI at 0% trailed the forecast of an increase by 0.20%. Even y-o-y final demand PPI and core PPI readings at 1% and 1.80% respectively trailed the respective forecasts of 1.30% and 2%. Earlier in the week,
