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Gold holds near May 15 highs as the dollar firms on Fed caution
Bullion gains are being supported by receding expectations for a near term Fed hike, even as the Treasury signals larger long dated bond buybacks and Iran Strait of Hormuz risks keep safe haven demand elevated.
Gold prices stayed in a bullish posture in the first half of the European session, trading close to the highest level since May 15, according to FXStreet.
The outlet cited shifting Fed expectations, with bets for an immediate US rate hike fading alongside softer US Treasury bond yields. That mix has supported non-yielding bullion, even as persistent geopolitical uncertainties have strengthened the safe haven US dollar and limited gold upside.
FXStreet also pointed to cooling July US inflation data, which has moved market expectations toward a policy hold at the September 15 to 16 FOMC meeting. The article said attention is turning to the US Personal Consumption Expenditures price index due on Wednesday, and to scrutiny of Fed Chair Kevin Warsh’s speech at the Jackson Hole Symposium for additional cues.
Beyond macro, FXStreet tied the dollar’s firmness to US Treasury plans and geopolitical risk. It said the Treasury will at least double buyback operations for long dated government debt starting in September, and it noted that US Treasury Secretary Scott Bessent is expected to announce what he called the toughest sanctions in history on Iran, with Iranian officials warning about potential disruption to oil exports through the Strait of Hormuz.
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