Gold Stable, Middle East Concerns Become a Restraint
Gold prices stabilized on Tuesday (July 7th) after weakening earlier in the session. Gold traded around US$4,170 per troy ounce, while investors monitored escalating tensions in the Middle East and awaited the minutes of the Federal Reserve's June meeting.
Previously, gold had touched a two-week high on Monday. This increase was driven by weaker-than-expected US employment data, prompting the market to reduce expectations of an imminent interest rate hike.
However, inflation concerns continue to hinder gold's gains. The market believes the Fed still has a chance of maintaining its "higher for longer" stance, or maintaining high interest rates for longer. Currently, traders estimate the chance of a September rate hike at around 60%.
From a geopolitical perspective, oil prices rose again after two tankers were reportedly attacked in the Strait of Hormuz. Iran also stated that it would halt peace talks if President Donald Trump continued to threaten to restart the war. This situation has made global markets more cautious and supported safe-haven assets like gold.
Meanwhile, China again increased its gold reserves, extending its buying streak to 20 consecutive months, bringing total reserves to 75.44 million ounces. Hong Kong also launched a gold clearing system and revived futures trading to strengthen its position as a regional gold hub. (yds)
Source: Newsmaker.id
