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Gold holds near $4,000 as Fed hike bets and dollar strength weigh
Gold is pressured by a stronger US dollar tied to higher rate expectations, while Middle East risks and a rebound in oil are also fueling inflation worries.
Gold is trading flat around the $4,000 level, struggling to extend a modest intraday bounce as the market leans toward higher US interest rate expectations, which strengthens the US dollar and limits upside for XAU/USD, according to FXStreet.
FXStreet points to rising Middle East tensions after the US said it completed a ninth straight night of strikes against Iran, with the stated aim of degrading Iranian military capabilities used to attack commercial vessels and mariners transiting the Strait of Hormuz. The outlet adds that Iran responded with ballistic missiles and one-way attack drones targeting regional US allies, with Bahrain, Jordan, Kuwait, and Iraq reporting renewed attacks.
The report says renewed geopolitical risk is also lifting crude prices to the highest since June 12, feeding inflation concerns and supporting bets that the Federal Reserve may need to raise rates in 2026. FXStreet further cites Cleveland Fed President Beth Hammack saying rates may need to rise to address persistent inflation, a stance that should support the dollar and make gold bulls cautious.
With Monday lacking major US economic releases, FXStreet notes traders may wait for follow-through buying to confirm whether gold has formed a near-term bottom, while additional comments from influential FOMC members and ongoing geopolitical headlines could drive short-term volatility in the market.
Latest closeGold $3,981.40 ▼1.6%|WTI crude $79.00 ▼0.8%