Gold Under Pressure Ahead of Europe, Oil Surge Strengthens Interest Rate Expectations
Gold prices weakened again ahead of the opening of the European trading session on Friday (July 24). Spot gold fell around 0.4% and traded around US$4,030 per troy ounce after plunging around 2% in the previous session.
Pressure on gold emerged after Brent oil prices broke through US$100 per barrel. The surge in energy costs fueled concerns that US inflation could rise again and prompted the Federal Reserve to maintain a tighter monetary policy.
US gold futures for August delivery fell to around US$4,033 per troy ounce. Despite weakening in the last two sessions, gold prices are still on track for a slight weekly gain of around 0.4%.
Market sentiment was further depressed after Brent prices surged around 7% in trading on Thursday. The oil surge occurred amid escalating Middle East conflicts and President Donald Trump's threats against Iran and the Houthi group following the attack on a Saudi tanker.
Market participants currently expect the Federal Reserve to maintain interest rates at its meeting next week. However, the probability of an interest rate hike in September has reached around 81%, limiting the appeal of non-yielding gold.
Ahead of the European session, gold is likely to remain under pressure as long as oil prices, bond yields, and expectations of interest rate hikes remain high. Prices are expected to fluctuate within the range of US$3,980 to US$4,170 per troy ounce.(asd)*
Source: Newsmaker.id
