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Gold slips as oil jump and higher Fed-rate bets support the US dollar
XAU/USD stays near its monthly low as crude rallies more than 10% this week on renewed US Iran tensions, with US macro data and hawkish Fed views reinforcing “higher for longer” expectations.
Gold prices are struggling to extend a modest intraday rebound above the $4,000 level and are trading near their monthly trough, according to FXStreet. The outlet cites a bearish setup for bullion, noting that the US dollar is getting support while gold itself offers no yield.
FXStreet links the dollar tailwind to crude oil’s sharp increase, with oil up more than 10% over the week amid renewed US Iran clashes that raise supply concerns and revive inflation worries. Rising energy prices are also seen as keeping pressure on the Federal Reserve to maintain rates at higher levels for longer.
The FXStreet note points to intensifying conflict around the US Iran standoff, including attacks that reportedly hit civilian infrastructure in southern Iran and retaliation involving missile and drone strikes aimed at US allied Gulf nations. It also highlights escalation around the Strait of Hormuz and the US intercepting commercial vessels, alongside Reuters reporting that Iran has asked Yemen’s Houthis to stand ready to close the Red Sea oil route.
On the rates side, FXStreet says upbeat US economic data and hawkish comments from Fed officials are reinforcing expectations the Fed will raise borrowing costs at least once by the end of the year. It cites US Labor Department data showing weekly unemployment claims fell to 208K for the week ended July 11, and the Philadelphia Fed Manufacturing Index jumping to 41.4 in July from 10.3.
Latest closeGold $3,981.40 ▼1.6%|WTI crude $79.00 ▼0.8%