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Gold prices hit fresh mid-May highs as USD stays near a 3-month low
Gold extended gains above the 200-day SMA as traders shifted toward a likely September Fed hold, while US Treasury long-dated buyback plans kept yields depressed.
Gold prices pushed higher into the European session, extending a rally to a fresh level since mid-May as the US dollar hovered near a three-month low, FXStreet reported.
The move followed declining expectations for an immediate Fed rate hike. Softer US inflation data in July cooled near term tightening bets, and market pricing shifted toward a policy hold at the September 15 to 16 FOMC meeting.
FXStreet also pointed to softer Treasury yields, aided by the US Treasury's plan to at least double buyback operations for long-dated government debt starting in September. The report said Treasury Secretary Scott Bessent indicated the buyback size could be more than $4 billion per issue, helping keep yields below a prior multi-year peak.
With the US PCE price index and a speech from Fed Chair Kevin Warsh at Jackson Hole also on investors' watch list, FXStreet said geopolitical risk could further support safe haven demand. It added that a proposed tougher US sanctions package on Iran has raised concerns about oil export disruptions through the Strait of Hormuz, sustaining a war-risk premium that can limit downside for the dollar and cap gold's declines.
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