Gold Near Highs

Gold Holds Near 7-Week High as Iran Uncertainty and Fed Outlook Drive Markets

Gold prices edged higher on Monday after reaching a seven-week high in the previous session, as investors monitored ongoing geopolitical uncertainty in the Middle East and awaited key US inflation data for fresh clues about the Federal Reserve’s interest-rate outlook.

Spot gold (XAU/USD) rose 0.3% to $4,354.51 per ounce at 10:03 WIB, while US Gold Futures also gained 0.3% to $4,414.40.

Gold prices climbed to their highest level since June 17 on Friday after data showed that the US economy unexpectedly lost jobs in July, while a sharp downward revision to the previous month’s employment growth further highlighted signs of weakness in the labor market.

The weaker-than-expected employment data prompted traders to significantly scale back expectations for a Federal Reserve rate hike in September. Futures markets now price the probability of a rate hike at the September 15–16 meeting at below 50%, compared with more than 50% previously.

Lower interest rates generally support non-yielding assets such as gold because they reduce the opportunity cost of holding the precious metal.

Market participants are now turning their attention to the US Consumer Price Index (CPI), due Wednesday, followed by the Producer Price Index (PPI) on Thursday. Softer-than-expected inflation readings could strengthen expectations for a more accommodative Federal Reserve policy and provide further support for gold prices.

Geopolitical Risks Keep Gold Supported

Geopolitical uncertainty remains another key driver of demand for precious metals. Iran said it was approaching a final agreement with Oman to establish a new shipping route through the Strait of Hormuz, although Tehran stressed that Washington still needs to meet several conditions before the strategically important waterway can fully reopen.

Geopolitical tensions typically support gold by increasing demand for the precious metal as a safe-haven asset. However, renewed gains in oil prices could complicate the inflation outlook and potentially limit expectations for Federal Reserve monetary easing.

Elsewhere in the precious metals market, silver prices rose 1.3% to $64.36 per ounce, while platinum gained 0.5% to $1,757.64.

Benchmark London Metal Exchange copper futures edged 0.6% higher to $14,126.33 per metric ton, while US copper futures advanced 0.7% to $6.635 per pound.

“Copper has rallied sharply on expectations of US import tariffs, as traders rush to move the metal into the US and physical markets become increasingly tight,” ING analysts said in a recent note. “With prices once again approaching record highs, disappointment over tariff policy could put the tariff premium to the test.”

Gold Market Outlook

Gold remains supported by a combination of softer US labor-market conditions, shifting Federal Reserve rate expectations, and persistent geopolitical risks. Investors will closely monitor the upcoming US inflation data, which could determine the next major direction for XAU/USD.

If inflation comes in below expectations, markets may increase bets on a more dovish Fed stance, potentially supporting gold’s upward momentum. Conversely, stronger inflation could push back expectations for monetary easing and limit further gains in the precious metal.

Share:

Read More

Gold Futures Rally

 

Why Are Gold Futures Rising Today?

Gold futures climbed 1.8% to $4,375.4 during today's session, extending a multi-day rally as escalating geopolitical tensions in the Middle East and weaker-than-expected U.S. labor market data continued to fuel demand for the precious metal. Investors remain cautious as uncertainty surrounding the Strait of Hormuz has reinforced gold's appeal as a safe-haven asset.

Risk sentiment remains fragile after renewed concerns over the Strait of Hormuz raised doubts about the prospects for a lasting U.S.-Iran peace agreement. According to Iran's semi-official media, a parliamentary committee is reviewing draft legislation that would prohibit vessels from the United States, Israel, and other "hostile" nations from transiting the strategic waterway. The proposal could impose penalties of up to 20% of a ship's cargo value for violations, increasing fears of disruptions to global energy supplies.

Gold had already gained momentum following a disappointing ADP Employment Report, which showed a sharp slowdown in U.S. private-sector hiring during July. Most new jobs were concentrated in the healthcare sector, highlighting broader weakness in the labor market. The softer employment data reduced expectations of a Federal Reserve interest rate hike in September, boosting demand for non-yielding assets such as gold.

The precious metal briefly surged above the $4,300 level on Thursday as optimism surrounding a potential Hormuz agreement encouraged buying. However, the rally lost some momentum after renewed geopolitical tensions revived concerns that higher oil prices could keep inflation elevated. Markets are now pricing in roughly a 60% probability of a September rate hike following reports that Federal Reserve Chair Kevin Warsh is prepared to raise borrowing costs if inflation remains persistent.

Meanwhile, U.S. equity markets delivered mixed performances on Thursday. The S&P 500 slipped 0.2%, the Dow Jones Industrial Average fell 0.9%, and the Nasdaq 100 declined 0.4% as rising oil prices and mixed corporate earnings pulled stocks back from record highs. Today, however, sentiment has stabilized, with the S&P 500 gaining 0.2% and the Nasdaq advancing 0.5%. This suggests that gold's strength is being driven primarily by commodity-specific fundamentals and broader macroeconomic factors rather than a broad flight from risk assets.

From a technical perspective, gold prices continue to trade above both the 21-day and 50-day Simple Moving Averages (SMAs), preserving a bullish near-term outlook. The Relative Strength Index (RSI) at 61 indicates strong positive momentum while remaining below overbought territory, leaving room for additional upside.

Overall, expectations for a potential reopening of the Strait of Hormuz, combined with a weaker U.S. dollar, have supported gold's recent rally. A weekly close above $4,330 would strengthen the bullish breakout scenario. Spot gold has now posted gains for four consecutive sessions, although analysts believe further upside will likely depend on continued weakness in U.S. economic data or meaningful progress in Hormuz negotiations. Today's U.S. Nonfarm Payrolls (NFP) report is expected to serve as the next major catalyst for gold prices and could determine the metal's short-term direction.

Share:

Read More

Gold Holds High

 

Gold Price Trims Gains, Holds Near Seven-Week High on Hormuz Optimism

Gold prices pared earlier gains on Thursday but remained close to a seven-week high as growing optimism over a potential agreement to reopen the Strait of Hormuz continued to ease inflation concerns and reduce expectations of further monetary tightening by the Federal Reserve.

As of 11:57 WIB (04:57 GMT), spot gold (XAU/USD) rose 0.4% to $4,262.54 per ounce, while Gold Futures gained 0.4% to $4,321.65 per ounce. Meanwhile, silver (XAG/USD) climbed 0.2% to $62.17 per ounce, and platinum (XPT/USD) advanced 1.3% to $1,756.50 per ounce.

Gold Holds Firm Despite Profit-Taking as Hormuz Optimism Supports Sentiment

Gold continued to find support even as traders booked profits, following reports that progress toward a diplomatic agreement involving the Strait of Hormuz could reduce geopolitical risks and stabilize global energy markets.

According to Reuters, a draft agreement between Iran and Oman aimed at ending the five-month conflict between Tehran and Washington would grant Iran authority over vessels entering the Gulf through the Strait of Hormuz. The proposal has raised hopes that disruptions to global energy supplies could ease, helping to improve overall market sentiment.

Crude oil prices declined on expectations that the agreement could reduce tensions in the region and lower the risk of supply disruptions. Softer energy prices have also eased inflation expectations, prompting investors to scale back bets on additional interest rate hikes by the Federal Reserve.

Market pricing now indicates a 55% probability of a Fed rate hike in September, down from approximately 67% earlier this week, reflecting a notable shift in investor expectations.

At the same time, lower U.S. Treasury yields and a weaker U.S. Dollar Index continued to support bullion prices. Since gold does not generate interest, falling bond yields and a softer dollar increase its appeal by reducing the opportunity cost of holding the precious metal.

With geopolitical developments, Federal Reserve policy expectations, and U.S. macroeconomic data remaining in focus, gold prices are likely to stay sensitive to changes in market sentiment in the coming sessions.

Share:

Read More