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Gold trades near recent lows as energy fears revive Fed hike bets
Crude oil remains firm near a one-month high amid US-Iran tensions, helping keep energy-driven inflation risks alive despite softer US PPI.
Gold held an offered tone in Asian trade on Wednesday, trading near the prior session’s swing low around the $4,030 to $4,025 area, FXStreet said.
The market backdrop is mixed, with US inflation data easing but energy risks pushing traders back toward more hawkish Fed expectations. FXStreet cited the US Bureau of Labor Statistics report that PPI unexpectedly fell 0.3% in June after a 0.6% rise the prior month, and that the year-over-year rate slowed from 6.0% in May to 5.5% in June, contributing to a cut in expectations for an immediate Fed hike.
At the same time, elevated crude prices supported the US dollar and weighed on bullion, since gold does not pay yield. FXStreet linked the oil strength to escalating US-Iran tensions, including another round of US airstrikes targeting coastal defense systems and missile infrastructure, and retaliatory Iranian drone and missile attacks on US-linked facilities, alongside warnings about potential strikes on critical infrastructure.
FXStreet added that the energy-driven inflation narrative continues to support the case for at least one 25 basis point Fed rate hike in 2026, which may limit USD downside and keep gold vulnerable while it remains below its 200-day simple moving average.
Latest closeGold $4,067.10 ▲0.1%|WTI crude $80.18 ▲1.1%