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Gold slips as dollar rebounds and oil prices rise on Middle East tensions

Gold around $4,090 after losing a four-day run, while CME FedWatch pricing shows a 78% chance of a September rate hike.

Reported · Written up by our desk · Major Pairs

Gold prices fell on Thursday, ending a four-day winning streak as the US dollar strengthened and oil extended gains amid renewed Middle East tensions, FXStreet reported.

At the time of writing, XAU/USD traded around $4,090 after reaching a two-week high of $4,165 on Wednesday. The renewed escalation included US strikes against Iran for the twelfth consecutive night, followed by Tehran targeting US bases in Jordan and Bahrain, FXStreet said.

Oil supply concerns also spread beyond the Strait of Hormuz after Yemen’s Houthis attacked two Saudi oil tankers in the Red Sea, lifting West Texas Intermediate crude to its highest level since June 11, near $89.50 per barrel, up about 28% for the month so far, according to FXStreet.

Rising energy costs are feeding inflation worries and strengthening expectations for tighter policy, with markets pricing a higher likelihood of a Federal Reserve rate hike at the September meeting, with odds at 78% versus 52% a week ago based on the CME FedWatch Tool. FXStreet also noted the 10-year US Treasury yield trading around 4.64%, its highest level since May 20, a factor that can weigh on gold through increased appeal of interest bearing assets.

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

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