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Gold slips near $4,400 as Iran-US tensions fight easing US inflation
US July CPI came in slightly softer than the prior month, helping cool expectations for an immediate Fed hike.
Gold prices fell to around $4,400 in early Asian trading on Thursday, as renewed US-Iran tensions and concerns tied to the Middle East weighed on bullion.
The move was partly offset by softer US inflation data that reduced pressure on the Federal Reserve to lift rates as soon as next month. US CPI rose 3.4% year on year in July, down from 3.5% previously, while core CPI increased 2.5% year on year, compared with 2.6% in June, according to US data cited by FXStreet.
FXStreet also noted that investor expectations for a September Fed hike eased after the CPI release. Interest rate swaps were pricing in nearly a 40.1% odds of a September hike, while odds for October fell to about 60% from 75% a day earlier, with December fully priced, based on the CME FedWatch tool.
On the geopolitical side, an Iranian senior official said Washington and Tehran remain at odds over efforts to agree a permanent end to the Gulf war, with FXStreet citing a lack of progress to revive the June interim deal and set an implementation timeframe. The report added that continued closure of the Strait of Hormuz keeps oil-linked inflation risks in focus, limiting gold’s downside.
Latest closeGold $4,467.10 ▲1.9%