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Gold slips below $4,400 as Fed hike bets and Middle East risks support USD

Gold remained near its June 5 peak as traders looked to US CPI for guidance on the Fed, with oil staying firm near a one-and-a-half-week high amid Strait of Hormuz and Red Sea shipping risks.

Reported · Written up by our desk · Precious Metals

Gold trimmed part of its intraday gains and was trading below $4,400 heading into the European session on Wednesday, while still up 0.50% on the day, FXStreet reported. The yellow metal stayed within striking distance of the highest level since June 5 as markets awaited the release of US Consumer Price Index (CPI) data.

The CPI is expected to offer more cues on the Federal Reserve’s policy path amid inflation risks tied to volatile oil prices. With oil holding near a one-and-a-half-week high, FXStreet noted that the developing outlook is poised to drive the US dollar and add impetus to gold.

Geopolitical developments continued to feed into energy-market risk premiums, FXStreet said. An Iran official said the Strait of Hormuz would not reopen until US demands are met, while Iran-backed Houthi rebels escalated attacks on vessels in the Red Sea and Bab el-Mandeb, including ships linked to Saudi.

Commerzbank said hopes for a near-term agreement between Iran and the US are fading after both sides hardened their positions, with Iran listing conditions including reparations and the US countering with compensation payments for conflict victims. Separately, CME Group’s FedWatch tool showed traders pricing in more than a 75.0% chance of at least one rate hike by the end of the year, supporting elevated Treasury yields and the safe-haven US dollar, FXStreet added.

Latest closeGold $4,430.80 ▲1.6%

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