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Gold edges down after two-month high as oil stays bid on Hormuz risk
WTI is up more than 6% this week, while CME FedWatch shows a 51.9% chance of a September rate hike as inflation concerns return.
Gold paused its rally after reaching a two-month high earlier in the Asian session, with XAU/USD slipping slightly to around $4,390, according to FXStreet.
The pullback follows uncertainty over when the Strait of Hormuz will reopen, which has kept oil prices elevated. Iran said the strait will not reopen unless Washington pays war reparations and meets multiple demands, while the US also signaled compensation claims, and Qatar said Iran and Oman negotiations have reached an advanced stage with positive feedback.
FXStreet said WTI was trading around $81.30, up over 6% for the week, after markets briefly cut back Federal Reserve rate hike expectations following weaker-than-expected July Nonfarm Payrolls.
With rising oil feeding back into inflation concerns, FXStreet noted rate hike expectations have tilted toward a September move, with CME FedWatch placing the probability at 51.9%. The article also pointed to an environment of a supported US dollar near recent lows and elevated Treasury yields that has been difficult for gold to accelerate, with traders looking ahead to US CPI data for fresh direction.
Latest closeGold $4,448.60 ▲2.5%|WTI crude $82.30 ▲5.3%