Home›Forex›Major Pairs›Gold holds above $4,100 as Fed hike bets rise on energ…

Gold holds above $4,100 as Fed hike bets rise on energy inflation fears

CME FedWatch pricing points to a more than 90% chance of a year end Fed rate hike, while US Treasury yields stay near a two-month high.

Reported · Written up by our desk · Major Pairs

Gold prices (XAU/USD) are consolidating above the $4,100 level through the Asian session, after a modest pullback from an over two-week high the prior day, according to FXStreet.

The driver is a jump in crude oil to a fresh high since June 11 amid escalating US and Iran tensions, which is stoking inflation fears and lifting expectations for further Fed rate hikes. That has pushed US Treasury bond yields to a multi-month high, a headwind for bullion.

FXStreet notes that the US and Iran have traded strikes for a 12th night in a row, and that Yemen’s Houthis opened a new front by declaring a blockade on a key Red Sea shipping route that supports about 7% of global oil supply. The report also points to reduced shipping traffic through the Strait of Hormuz, adding to supply disruption concerns and helping crude extend its uptrend.

Traders are watching the latest Weekly Initial Jobless Claims data for direction, with FXStreet also flagging potential volatility from the ECB meeting. Per CME Group’s FedWatch Tool, investors are pricing in over a 90% chance of a Fed hike by the end of this year, while a weaker US dollar is providing some support for gold, the outlet added.

Latest closeGold $4,117.00 ▲1.1%|WTI crude $87.52 ▲3.1%

More like this

Sources