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Gold rebounds above $4,350 as the dollar stays pressured before FOMC minutes
The move comes as traders watch the FOMC Minutes for clues on the Fed’s path, while Middle East-linked crude strength keeps inflation worries alive.
Gold prices climbed back above $4,350 in the first half of the European session, reversing part of the heavy losses from the prior day, according to FXStreet.
FXStreet said a softer US dollar helped support XAU/USD, with the week’s rebound from a two-month low appearing to stall. It noted that traders may hold off on fresh bets until the US Federal Reserve’s FOMC Minutes are released, given ongoing inflation jitters tied to rising energy prices from the Middle East situation.
The inflation concern has been reinforced by crude oil strength, which FXStreet linked to developments around the Strait of Hormuz, including an active US-Iran standoff. The outlet also pointed to geopolitical risk keeping pressure on longer-dated rates, citing that the 30-year US bond yield has risen to its highest level since June 2007.
FXStreet added that CME Group’s FedWatch Tool shows traders pricing roughly a 68% chance of a Fed rate hike by year end. On the technical side, it said the gold pair has struggled to gain acceptance above the 50% retracement of the April-June decline and remains below the 200-day simple moving average, keeping the near-term bias tilted bearish even as some bullish momentum persists.
Latest closeGold $4,432.00 ▲1.6%|WTI crude $82.40 ▲1.4%