Gold Gains Slightly, But Heads for Weekly Decline
Gold prices edged higher on Friday (July 17th), but remained on track for their biggest weekly decline in six weeks. The main pressure came from the escalating US-Iran conflict, which pushed up oil prices and rekindled inflation concerns.
Spot gold rose 1.1% to US$4,015.09 per troy ounce after hitting its lowest level since July 1st. Meanwhile, US gold futures for August delivery rose 0.7% to settle at US$4,018.80 per troy ounce.
Despite the daily gain, gold still weakened by around 3% for the week. This decline was the largest since June 1st, as inflation concerns stemming from the Middle East conflict outweighed support from lower US inflation data for June.
The rise in oil prices, which has risen by around 12% in the past week, has added to the pressure on gold. The surge in oil risks pushing inflation back up, reinforcing expectations that the Fed could raise interest rates again.
Several Fed officials have also signaled hawkish sentiment. Dallas Fed President Lorie Logan has publicly called for an interest rate hike, while Fed Vice Chairman Philip Jefferson has left open the possibility of a similar move if inflation doesn't improve in the near future.
As a result, gold remains under pressure on the market, despite some buying when it fell below US$4,000. As long as oil prices remain high, inflation remains a threat, and the possibility of an interest rate hike remains open, gold's movement has the potential to remain limited in the short term.
Source: Newsmaker.id
