Gold Holds Steady Ahead of CPI; Hormuz and Interest Rates Key Factors
Gold prices remained relatively stable during Wednesday morning trading after pulling back from a two-month high in the previous session. Spot gold hovered around US$4,368–US$4,370 per troy ounce, following a roughly 0.5% decline at Tuesday's close.
Markets remain focused on developments in the Strait of Hormuz. Pakistan's Defense Minister stated that the US and Iran are nearing an agreement to reopen the waterway, even though both Washington and Tehran have adopted a tougher stance in recent days.
Meanwhile, oil prices remain elevated after rising for four consecutive sessions. This situation has reignited inflation concerns and made it difficult for the market to gauge the Federal Reserve's policy direction. The probability of a 25-basis-point interest rate hike next month currently stands at around 50:50.
Investor focus today is primarily on the US Consumer Price Index (CPI) for July. Consensus estimates suggest a monthly inflation rise of approximately 0.1%, following a 0.4% decline previously. Coming on the heels of weaker US labor market data, a lower CPI reading could further alleviate pressure on the Fed to raise interest rates.
However, energy-driven inflation poses a risk to gold. If high oil prices push the CPI higher, expectations for interest rate hikes could resurge. Such a scenario could boost the dollar and Treasury yields, thereby dampening gold's appeal.
Newsmaker Analysis: Gold remains resilient above US$4,300 but has yet to confirm the continuation of a major rally. The US$4,200 level serves as a crucial support zone, while US$4,500 marks the next key resistance level. A cooler CPI reading could pave the way for gold to move back toward the US$4,400–US$4,500 range, whereas hotter inflation could trigger a deeper correction. (asd)*
Source: Newsmaker.id
