Gold Attempts a Recovery!
Gold prices hovered around US$4,080 per troy ounce during pre-European session trading on Friday, heading for their first monthly gain since February. The precious metal is expected to rise nearly 2% over July, bolstered by the Federal Reserve's decision to maintain interest rates.
Gold dipped during Friday's trading after the US dollar regained strength against the yen. Previously, the dollar had weakened sharply due to suspected Japanese intervention in the foreign exchange market, making gold cheaper for buyers using other currencies.
Despite the monthly gain, gold prices remain down more than 20% since the onset of the US-Iran conflict. The surge in energy prices resulting from the conflict has heightened inflationary pressures and increased the likelihood that interest rates will remain high for longer.
The Fed's decision to hold rates steady has not entirely eliminated risks for gold. A 9-to-3 vote split revealed that some officials still believe interest rate hikes may be necessary to bring inflation back toward the 2% target.
Markets are now awaiting further clues regarding Fed policy, particularly from the Jackson Hole symposium in late August. As long as gold holds above the psychological US$4,000 level, "buy-the-dip" activity could sustain its upward momentum, although a strengthening dollar and the threat of high interest rates may still limit its gains. (asd)*
Source: Newsmaker.id
