Gold Rebounds Strongly, Bullish Signals Emerge
Gold prices rose to a two-week high on Wednesday (July 22nd), supported by buying as prices fell around the psychological US$4,000 level. XAU/USD was seen trading around US$4,147 per troy ounce, up 1.7% today.
Gold's rise occurred amid escalating Middle East tensions. The United States launched its 11th nighttime attack on Iran, while Tehran retaliated by targeting Bahrain, Kuwait, and Jordan.
The retaliatory attack disrupted energy supplies through the Strait of Hormuz, causing oil prices to rise again. WTI traded around US$86.50 per barrel, its highest level since June 11th.
However, rising oil also poses new risks for gold. High energy prices can fuel inflation and strengthen expectations that the Fed will maintain high interest rates for longer, even opening the door to additional rate hikes.
As a result, gold continues to receive support from bargain hunting and geopolitical risks. However, XAU/USD's gains could be restrained by a strong US dollar, high Treasury yields, and the increasing likelihood of a Fed rate hike. The market now estimates the probability of a July rate hike has risen to 28%, while the probability of a September rate hike is at 69%. (arl)
Source: Newsmaker.id