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Gold steadies lower as USD firms on oil and Fed-hike expectations
Gold’s slide comes as traders using CME Group’s FedWatch tool see about a 64% chance the Fed holds rates unchanged at its September 2026 meeting.
Gold (XAU/USD) is drifting lower after a modest bounce in the Asian session stalled the metal’s two-day move off the $4,300 area, FXStreet reports.
FXStreet attributes the pressure on gold to a stronger US dollar, which is building on a rebound from a two-month trough. The outlet points to inflation risks tied to higher crude oil prices, which are supporting expectations for at least one US Federal Reserve rate hike in 2026, while geopolitics also keeps a safe-haven bid for the dollar.
The article also links gold weakness to heightened tensions in the Middle East. US President Donald Trump said Iran should surrender to end its nearly six-month war, and he said the US is not seeking an extension of a Memorandum of Understanding with Iran that expired on Monday.
FXStreet further notes that Iran-backed Houthi rebels have escalated attacks on Saudi Arabia, including the use of ballistic missiles against a Saudi military landing ship and patrol boats off Yemen’s coast. That risk raises concerns about shipping disruptions through the Bab al-Mandeb Strait, lifting crude to a two-week high and reviving worries about energy-driven inflation.
The higher oil-driven inflation concern is offsetting softer US inflation and retail sales data from last week, the report says. It adds that while aggressive bets may be limited, gold’s downside appears capped as investors watch for more signals on the Fed’s policy path.
Latest closeGold $4,432.00 ▲1.6%|WTI crude $82.40 ▲1.4%