Oil Rally Stalls, Gold Gains Momentum
Gold prices rose slightly in trading on Friday (July 24th) after Brent crude fell from above US$100 per barrel. Spot gold rose 0.4% to US$4,063.78 per troy ounce, while futures rose to US$4,063.50.
Gold is on track for a weekly gain of more than 1% as investors continue to monitor the Middle East conflict. The decline in oil prices has helped ease concerns that soaring energy costs will exacerbate inflationary pressures.
Geopolitical tensions remain high after the United States military completed its 13th wave of attacks on Iran. The attacks targeted military facilities, drone storage sites, and coastal surveillance posts.
Iran has also reportedly rejected a US-backed ceasefire proposal. The risk of oil supply disruptions remains looming as the conflict involves the Strait of Hormuz and Bab el-Mandeb, two vital global energy shipping routes.
The market is pricing in a 29% chance that the Federal Reserve will raise interest rates by 25 basis points at its meeting next week. Despite this, Nomura expects the Fed to maintain interest rates without providing many clues about its future policy direction.
The continued strength of the US dollar could limit gold's gains by making the precious metal more expensive for foreign buyers. However, as long as oil continues to correct and geopolitical tensions persist, gold has the potential to maintain its weekly gains. (arl)
Source: Newsmaker.id
