US-Iran Pause Lifts Gold Prices
Gold prices strengthened on Monday (July 27th), trading around US$4,079 per troy ounce. The precious metal found support after a pause in US-Iran attacks pushed oil prices sharply lower.
The easing of the conflict raised hopes for a diplomatic agreement and the reopening of shipping lanes in the Strait of Hormuz. President Donald Trump said talks with Iran were going well, although the risk of conflict had not completely disappeared.
Brent oil prices fell 8.7% to close at US$88.36 per barrel. WTI also slumped 7.5% to US$82.61 per barrel, as concerns about surging inflation due to energy costs began to ease.
The US dollar also weakened slightly, making gold more affordable for buyers using other currencies. The decline in oil and dollar prices helped offset pressure from expectations of still-high US interest rates.
Investors now await the Federal Reserve's decision on Wednesday. The market estimates a 62% chance that interest rates will remain unchanged, but the probability of a September hike remains around 82%.
The market will also be watching US PCE inflation data on Thursday. As long as oil prices and the dollar remain low, gold has a chance of holding above US$4,000, but aggressive statements from the Fed or a worsening of the conflict could trigger another sharp move. (arl)
Source: Newsmaker.id
