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Gold hovers above $4,250 as Fed hike bets boost the US dollar
Risk concerns around US-Iran talks and potential Strait of Hormuz disruptions are supporting USD safe-haven demand and limiting gold’s upside ahead of US nonfarm payrolls.
Gold prices held just above $4,250 after earlier pulling back from levels above $4,300, as dip buyers stepped in during the Asian session. FXStreet said the metal is set for its best week since January, but upside appears limited by competing macro and geopolitical signals.
The dollar has been supported by renewed expectations for tighter US policy, with CME Group’s FedWatch tool showing traders still pricing an over 80% chance of a rate increase by the end of this year. FXStreet noted that the prospect of a hawkish Fed stance can cap gains for gold, which does not yield.
Geopolitical developments tied to US-Iran diplomacy are also in focus. FXStreet reported that US President Donald Trump said he believes the war with Iran will end soon, but a Saudi official warned that some Iraqi militia factions, linked with Yemen’s Iran-backed Houthis, are planning attacks on Saudi Arabia, raising the risk of a wider regional conflict.
Ahead of the key US monthly employment data, traders appear cautious about new directional bets. FXStreet said the nonfarm payrolls report is expected to shape expectations for the Fed’s next steps, which in turn should drive USD demand and determine whether gold’s recovery from the $4,000 level can continue.
Latest closeGold $4,292.00 ▲1.1%