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Gold slips as hawkish Fed bets meet mixed US-Iran signals
Gold trades around $4,050, up 0.2% on the day, but is capped by hawkish rate expectations including a 65% chance of a September hike per CME FedWatch.
Gold prices held modest gains but struggled to build momentum as markets weighed conflicting US-Iran headlines and looked ahead to a busy US jobs calendar for guidance on the Federal Reserve’s policy path, FXStreet reported. At the time of writing, XAU/USD traded near $4,050, up 0.2% on the day, after hitting an intraday high of $4,084.
FXStreet said US President Donald Trump indicated he had called off a planned strike on Iran over the weekend and that negotiations were expected to begin on Monday, a development that boosted hopes for a peace deal and sent oil prices sharply lower. WTI was down more than 7% at the time of writing, and that pullback eased immediate inflation concerns, helping support gold through lower Treasury yields.
Still, traders remained cautious about the likelihood of a deal, after Iran’s foreign ministry spokesperson said Tehran is not currently holding talks with Washington, FXStreet added, keeping supply disruption risks through the Strait of Hormuz in focus. The outlet also pointed to hawkish Fed messaging, including New York Fed President John Williams saying policy is positioned to reach 2% inflation, and noting that the Fed would intervene if inflation is not on track.
Despite broader US dollar weakness tied to Japanese intervention to support the yen, FXStreet said gold’s upside is capped by expectations that the Fed may raise rates this year. The CME FedWatch Tool places the odds of a September rate hike at 65%, and FXStreet cited technical signals showing gold trading below the 21-day simple moving average and well under longer-term moving averages, with resistance near $4,066 and then the 50-day level.
Latest closeGold $4,098.60 ▼0.0%|WTI crude $86.80 ▲3.8%