Gold Remains Calm, Risks Aren't Over
Gold prices are holding steady at around US$4,050 per troy ounce after previously strengthening by 1.3%. This strengthening occurred because US inflation data for June came in lower than expected, easing pressure on the Fed to raise interest rates.
US CPI data showed consumer prices fell monthly for the first time in six years. The largest decline came from gasoline prices, giving the market room to assess that inflationary pressures were easing after being triggered by the Iran war.
The impact was immediately felt in the bond market. Market participants began to reduce bets on a Fed rate hike in July. The probability of a rate hike this month fell to around 17%, significantly lower than the nearly 50% seen the day before.
However, gold is not completely free from pressure. Fed Chairman Kevin Warsh did not directly signal a rate hike, but he emphasized that the Fed still has the tools to keep inflation within its 2% target. This statement kept the market reading the central bank's hawkish tone.
Another risk comes from the Middle East. Although Trump canceled plans to impose a 20% levy on cargo passing through the Strait of Hormuz, the US has continued its blockade of Iranian shipping and renewed attacks on targets deemed to threaten commercial shipping. If oil prices rise again, inflationary pressures could resurface in the following month's data.
For now, the US$4,000 area is starting to be seen as a key floor for gold. However, gold's gains could be restrained if the dollar and yields strengthen again. So, while a subdued CPI provides fresh impetus, gold's future direction remains dependent on further inflation data, the Fed's comments, and developments in the US-Iran conflict. (asd)*
Source: Newsmaker.id
