Gold Nears $4,400 as Investors Await U.S. Inflation Data for Fed Signals
Gold prices extended their gains on Wednesday, holding near the $4,400-per-ounce level as investors awaited key U.S. inflation data for fresh clues about the Federal Reserve’s interest-rate outlook. Market participants were also monitoring uncertainty surrounding efforts to reopen the Strait of Hormuz.
At 14:22 WIB, XAU/USD rose 0.7% to $4,400.02 per ounce, while Gold Futures gained 0.4% to $4,459.30. XAG/USD climbed 1.8% to $65.88 per ounce, while XPT/USD advanced 0.7% to $1,755.16.
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Hormuz Uncertainty Supports Oil Prices as Fed Rate Outlook Remains in Focus
Gold remained supported near a two-month high as investors reassessed the prospects of a deal to reopen the Strait of Hormuz. Pakistan’s defense minister said Washington and Tehran were close to reaching an agreement, while reports of further talks between Oman and Iran suggested that diplomatic efforts were still underway.
However, Iran said the waterway would remain closed until the United States met its demands, including lifting the blockade on Iranian ports and providing compensation for damage caused by U.S. military strikes.
The conflicting signals have kept energy markets volatile. The United States and Iran-aligned Houthi forces in Yemen reported separate attacks involving vessels in the Strait of Hormuz and Bab el-Mandeb. Meanwhile, a U.S. Navy helicopter fired missiles at a Panama-flagged cargo vessel attempting to transit the Gulf of Oman.
A drone attack also targeted an oil refinery in Libya.
For gold, the inflationary implications remain a key market driver. Higher energy prices could encourage the Federal Reserve to keep interest rates elevated for longer, increasing the opportunity cost of holding non-yielding gold.
CPI, Chinese Gold Buying, and Technical Resistance Set the Next Test
Investors are now awaiting the release of the U.S. Consumer Price Index (CPI) on Wednesday, followed by Producer Price Index (PPI) data on Thursday. A weaker-than-expected inflation reading could reduce pressure on the Federal Reserve to tighten monetary policy, while a hotter-than-expected figure could revive expectations for higher interest rates.
Markets have remained cautious ahead of the CPI release, with swap markets pricing roughly a 50-50 chance of a 25-basis-point rate hike in September.
Meanwhile, the People’s Bank of China (PBoC) increased its gold reserves for the 21st consecutive month in July, adding approximately 640,000 troy ounces and bringing total holdings to 76.08 million ounces. China-based gold ETFs have also continued to attract buyers, reinforcing signs of stronger institutional demand in recent weeks.
Tony Sycamore, senior market analyst at IG, said gold’s recent pullback from $4,435 reflected profit-taking ahead of the CPI report, hawkish Federal Reserve commentary, and a renewed rise in energy prices.
Sycamore noted that gold is now facing descending trendline resistance around $4,460, drawn from the late-January record high near $5,602. The 200-day moving average around $4,495 adds another layer of resistance.
According to Sycamore, gold would need a sustained break above both levels to open the door to a stronger recovery toward the $5,000 level.