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Gold rises as US-Iran tensions lift inflation-rate hike odds
XAU/USD last traded around $4,013 after a daily low near $3,959, as energy-linked inflation expectations and Fed rate-hike probabilities were repriced.
Gold edged higher by about 0.9% on Friday, with XAU/USD trading around $4,013 after hitting a daily low near $3,959, as renewed US-Iran escalation boosted an inflation and rate-hike narrative, according to FXStreet.
FXStreet said the market focus remains on how higher energy prices can feed into inflation, while ongoing geopolitical tensions weighed on sentiment even as US equities recovered. The outlet also cited Axios reporting that the Trump administration is sending additional refueling planes to Israel in preparation for a potential expansion of military operations.
On the data front, the University of Michigan Consumer Sentiment for July improved from 50.7 to 54 on the back of lower gasoline prices, FXStreet reported. Inflation expectations for one year fell from 4.6% to 4.2%, while five-year expectations stayed steady at 3.3%.
FXStreet added that Fed Vice Chair Philip Jefferson said he is open to raising rates if there is no progress toward disinflation, and money markets priced in roughly a 61% probability of a Fed rate increase at the October 28 meeting, with a 76% chance the July meeting keeps rates steady. The article also noted gold is technically pressured, with the RSI below the 50 neutral level and key levels clustered around $4,000 support and $4,125 to $4,175 resistance.
Latest closeGold $3,981.40 ▼1.6%|Gasoline (RBOB) $3.114 ▼5.7%