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Stronger dollar and higher yields keep gold under pressure
Gold is still recovering from September’s 6% drop, while Brent pushed back above $100 per barrel as attacks in the Strait of Hormuz and on Saudi oil infrastructure lift energy prices.
A stronger US dollar, a rally in Treasury yields, and oil that has been slow to fall are weighing on gold, Action Forex reports.
The outlet says gold failed to rebound after September, when it dropped 6% amid a Fed rate hike, a strengthening dollar, and a surge in long-term Treasury yields to 24-year highs.
Other headwinds include persistently high energy prices. Brent has moved back above $100 per barrel after Iran resumed attacks on tankers in the Strait of Hormuz and Yemeni Houthis targeted Saudi Arabian oil infrastructure, according to Action Forex.
Action Forex adds that oil flows through the Strait of Hormuz fell from 91% to 74% of pre-war levels, while investors remain uncertain whether the Fed will tighten in October or delay until December. CME futures cited by the outlet put the probability of an October rate rise at 22% and a December rise at 85%, with FOMC officials expressing conflicting views.
Latest closeGold $4,150.40 ▼0.3%|Brent $100.73 ▼1.5%