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Gold holds gains but faces limits as Fed hike bets persist
Gold’s advance is capped as markets price a 63% chance of a September rate hike, and US-Iran tensions raise fresh inflation concerns.
Gold steadied on Thursday, recovering some ground after three straight sessions of declines as the US dollar softened modestly and Treasury yields pulled back, FXStreet reported.
Still, gold’s upside appears limited. Renewed hostilities in the Middle East are reviving concerns about potential energy-driven inflation, reinforcing expectations that the Federal Reserve may need to raise rates further, which typically weighs on non-yielding bullion.
Tensions involving the United States and Iran escalated again, with Trump saying on Truth Social that any further incident would be met with worse consequences and Iran reiterating a threat to close the Strait of Hormuz if attacks continue. FXStreet said that uncertainty has also weakened hopes for a permanent peace agreement, affecting risk sentiment.
The article also cited FedWatch pricing of a 63% chance of a September rate hike and comments from New York Fed President John Williams that inflation remains too high and the Fed is actively debating inflation scenarios while working toward its 2% target. FXStreet added that technicals keep gold biased lower near term, with the metal below key levels including the 20-day Bollinger mid-band near $4,135, after trading around the $4,000 area.
Latest closeGold $4,023.80 ▼1.2%