Gold Hold, Oil Surge Sparks Interest Rate Concerns
Gold prices held around US$4,043 per troy ounce on Friday (July 24th) after falling around 2% in the previous session. This decline erased most of the gains in the past two days, which were driven by buying on dips.
Pressure on gold emerged after the conflict in the Middle East escalated and pushed energy prices higher. This situation raised concerns that US inflation could rise again, potentially leading the Federal Reserve to tighten monetary policy.
Brent oil prices surpassed US$100 per barrel for the first time since May. At the same time, the yield on two-year US government bonds rose for six consecutive days, reflecting growing expectations of high interest rates.
Uncertainty also increased after President Donald Trump threatened to escalate attacks on Iran. The US government also announced import levies of 10% to 12.5% on goods from most major trading partners.
The swaps market now rates a 34% chance that the Fed will raise interest rates at its meeting next week. At least one rate hike has also been priced in for September, with the possibility of additional hikes before the end of the year.
Spot gold was relatively stable at US$4,048.25 per troy ounce, while silver was at US$57.62 after falling 3.6% in the previous session. As long as energy prices and expectations of interest rate hikes remain high, gold could potentially remain under pressure, although the US$4,000 area is considered a key support level. (asd)*
Source: Newsmaker.id
