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Gold holds above $4,100 as USD softens on Fed hike bets
CME FedWatch points to about an 85% chance of at least one Fed rate hike by year end, while US-Iran tensions keep investors focused on inflation risks.
Gold prices struggled to extend a prior rebound, hovering around the $4,109 to $4,108 area as the US dollar stayed under pressure for a third straight session, FXStreet said. The outlet attributed the bullion support to weaker USD sentiment following a less hawkish tone in the FOMC minutes.
FXStreet noted the June 16 to 17 FOMC minutes showed policymakers divided on the rate path, with many participants suggesting the federal funds rate could end the year within or slightly below the current target range. At the same time, officials indicated some policy firming was likely to be needed because upside inflation risks remain elevated, and CME Group’s FedWatch Tool put the odds of at least one hike by year end at nearly 85%.
The report also pointed to geopolitical risk as a competing driver, with escalating US-Iran tensions pulling attention back to oil and potential knock-on effects for inflation and the global rates outlook. FXStreet cited CENTCOM airstrikes hitting 90 Iranian military targets, alongside Iran’s missile and drone retaliation and warnings of wider regional response.
Despite the support from USD selling, FXStreet said gold lacked strong follow-through buying and remains susceptible to bearish pressure below the 200-day SMA, keeping it on track for modest weekly losses. The outlet added that markets are watching for confirmatory signals after the latest developments in the US-Iran situation.
Latest closeGold $4,131.40 ▲1.5%