Harmovest Capital | Daily Report: Will Rising Prices Trigger a Risk Asset Pullback?

23/04/2026

Key Highlights

• UK inflation rises again

• Safe-haven sentiment strengthens

• Gold faces renewed downside pressure

Market Review

Fuel prices surged during the Iran conflict, pushing UK inflation to 3.3% in March, according to data released by the Office for National Statistics. The increase was largely driven by sharp gains in fuel and airfare costs, marking the strongest fuel price rise in over three years.

As an energy-importing nation, the UK remains highly vulnerable to global energy shocks, particularly those stemming from Middle East tensions. Economists expect inflation pressures to persist if energy and food prices continue rising.

Before the conflict began, the Bank of England was expected to cut interest rates as inflation moved closer to the 2% target. However, the recent rebound in inflation has increased uncertainty around policy decisions. Most economists now expect the central bank to keep rates unchanged for the remainder of the year, while remaining cautious about the risk of stagflation.

Affected Instruments: GBP | Gold | S&P 500

Summary

Although UK inflation has risen due to energy price pressures linked to the Iran conflict, the broader economic slowdown is likely to limit further inflation acceleration. As a result, the Bank of England is expected to maintain interest rates this year, which may provide short-term support for the British pound.

Todays Key Events

• Eurozone PMI

• UK PMI

• U.S. PMI

Markets will closely monitor the U.S. PMI data. While the U.S. economy remains resilient, signs of gradual slowing have emerged, leading markets to expect weaker-than-forecast readings.

Impacted Financial Instruments

• U.S. Dollar

• Precious Metals (Gold, Silver, Platinum)

• U.S. Equity Indices

Trading Strategy

Bias: Long (Precious Metals)

Market Sentiment

Fear & Greed Index

The Fear & Greed Index currently stands at 70 (Risk-On), compared with the previous level of 36, indicating that safe-haven demand has gradually eased.

Markets are increasingly digesting developments related to the Iran conflict, leading to a cooling in risk-off sentiment. This shift has contributed to a softer U.S. dollar and improving performance in risk assets such as equities and cryptocurrencies.

Technical Analysis

XAUUSD (Gold)

Following the temporary ceasefire announcement by Donald Trump, safe-haven demand declined, and U.S. 10-year Treasury yields moved lower, indirectly supporting gold prices.

Technically, gold has broken above the 4844 resistance level, suggesting continued bullish momentum in the near term.

Strategy: Maintain a bullish bias, with key support to monitor around the 4700 level.