Gold steady near two-month high of around US$4,400 as traders weigh US Fed interest-rate path
Risk of monetary tightening remains as oil prices climbed after the US threatened to impose economic measures on Iran
Gold prices remained stable near a two-month high of around US$4,400 as traders evaluated the potential effects of cooling US economic data and rising energy-related inflation on the Federal Reserve's interest-rate decisions. The metal was trading close to US$4,370 per ounce, following a nearly 1 percent increase from the prior week.
Recent US data revealed drops in both consumer confidence and retail sales, which helped alleviate concerns about a possible rate hike, which generally inhibits non-yielding assets like gold. However, uncertainty surrounding the global energy supply persisted, maintaining the possibility of monetary tightening. In the Strait of Hormuz, additional ships faced attacks late in the week of August 16, while the US announced plans to implement new economic sanctions against Iran.
Despite this, vessels continue to navigate the strait, sometimes with satellite transponders disabled to evade detection. Iranian and Omani officials seem to be nearing an agreement on managing the crucial waterway, although the US is not involved in these discussions. Upcoming, the US Federal Reserve's July policy meeting minutes will be released on Wednesday, August 19, offering some insight into their rate considerations.
Gold's ascent above the US$4,000-an-ounce mark in recent weeks has been fueled by increased investor interest and a rise in central bank purchases, particularly from China. In the week ending August 16, the metal surpassed its 100-day moving average for the first time since April and remains close to that level. "Spot gold remained unchanged at US$4,376 an ounce at 7:24 am Singapore time," while silver gained 0.6 percent at US$65.08 an ounce, up nearly 2 percent from the previous week.
Platinum and palladium also rose. The Bloomberg Dollar Spot Index, which tracks the US dollar, fell 0.1 percent.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
