Risk tilt weighs on gold

Asian Markets

Japanese markets faced a double dose of volatility. Tokyo's core CPI surged to 3.4% YoY in April, a full point higher than March, with price pressures spreading across services and housing. This inflation spike adds friction ahead of the Bank of Japan’s upcoming policy meeting, even as most investors expect no immediate rate changes due to tariff-linked uncertainty.

Meanwhile, Japan unveiled a fresh stimulus plan, aiming to blunt the impact of U.S. tariffs.

The yen tumbled against the U.S. dollar following the CPI data, marking one of the sharpest drops among major currencies.

European Markets

Opened the day digesting stronger-than-expected UK retail figures. March sales rose 0.4% month-on-month, defying forecasts of a decline. The data injected mild optimism into sterling markets, with GBP/USD edging higher, although gains were restrained by broader dollar strength. The upside surprise in spending adds a layer of complexity to the Bank of England’s inflation balancing act, especially in light of weak wage growth signals earlier this week.

US markets

In the U.S., attention turns to University of Michigan’s consumer sentiment data, due later today. With no major Fed speakers scheduled, markets are likely to key off inflation expectations.

Commodities

In the commodities space, gold prices backed off from the $3,370s after a strong overnight rally. A slight recovery in risk appetite—driven by trade de-escalation hopes—pressured the safe-haven asset. The metal remains vulnerable in the short term, especially if sentiment data and dollar flows continue to favor risk.