Oil Pressures Gold

Gold Prices Slip as Rising Oil Fuels Inflation Concerns and Supports Stronger US Dollar

Gold prices declined on Thursday as another surge in crude oil prices reignited inflation concerns, reinforcing expectations that the Federal Reserve could keep interest rates elevated for longer. The stronger US dollar and higher Treasury yield outlook reduced demand for non-yielding assets such as gold.

As of 08:31 WIB, spot gold (XAU/USD) fell 0.59% to $4,036.62 per troy ounce, while Gold Futures slipped 0.24% to $4,042.10.

Softer US Inflation Eases Pressure on the Federal Reserve

US producer prices unexpectedly fell 0.3% in June, defying market expectations for no monthly change. The weaker Producer Price Index (PPI) followed softer Consumer Price Index (CPI) data released earlier this week, reinforcing signs that underlying inflationary pressures are easing.

The back-to-back inflation reports initially strengthened expectations that the Federal Reserve may delay further interest rate hikes, providing a supportive backdrop for precious metals. However, investors largely overlooked the backward-looking inflation data as renewed conflict in the Middle East pushed crude oil prices higher for a fourth consecutive session.

The renewed rally in oil has revived concerns that rising energy costs could feed into future inflation, limiting the Fed's flexibility to ease monetary policy despite recent progress in reducing price pressures.

While lower inflation would normally weaken the US dollar and support gold by reducing expectations of tighter monetary policy, the sharp rebound in oil prices has cast doubt on whether the current disinflation trend can be sustained.

Federal Reserve Chair Kevin Warsh reiterated this week that policymakers remain committed to bringing inflation back to the central bank's 2% target, emphasizing their readiness to adjust interest rates if price pressures prove more persistent than expected. He also dismissed concerns that rapid investment in artificial intelligence alone would trigger broader inflationary pressures.

Meanwhile, Fed Governor Lisa Cook said she would support additional policy action if inflation remains elevated, while New York Fed President John Williams stated that current interest rates are "well positioned" to return inflation to target, highlighting the central bank's cautious approach despite encouraging inflation data.

Oil Rally Revives Inflation Risks

Despite improving inflation data, escalating geopolitical tensions in the Middle East continue to keep investors on edge.

The United States launched a fifth consecutive day of strikes against Iranian targets, while President Donald Trump pledged to intensify military operations until Tehran halts attacks on commercial shipping and reopens the Strait of Hormuz.

Brent crude and West Texas Intermediate (WTI) extended their recent gains as markets monitored potential supply disruptions through the critical shipping route, fueling concerns that higher energy prices could once again drive broader inflation.

A sustained increase in oil prices could complicate the Federal Reserve's policy outlook by raising the risk that inflation remains above target for longer. Should policymakers maintain higher interest rates for an extended period, stronger US Treasury yields and a firmer US dollar would likely weigh on gold demand while making the precious metal more expensive for overseas buyers.

Analysts at ANZ said the key question is whether the Federal Reserve views the recent surge in energy prices as a temporary supply shock or as a development that could spill over into broader inflation, potentially influencing future monetary policy decisions.

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Gold Eases Lower

 

Gold Prices Slip as Oil Rally Revives Inflation Concerns and Clouds Fed Outlook

Gold prices edged lower on Thursday as investors reassessed the inflation outlook following another surge in crude oil prices. Rising energy costs have renewed concerns that inflationary pressures could persist, complicating the Federal Reserve's policy path despite softer-than-expected U.S. consumer inflation data released earlier this week.

Gold Declines as Investors Shift Focus to Inflation Risks

As of 1:15 PM WIB, spot gold (XAU/USD) fell 0.6% to $4,028.43 per troy ounce, while Gold Futures slipped 0.8% to $4,035.50. Meanwhile, silver (XAG/USD) dropped 0.5% to $58.35 per ounce, and platinum (XPT/USD) eased 0.1% to $1,629.89 per ounce.

The pullback follows a strong rally earlier in the week, when gold climbed more than 2% after weaker-than-expected U.S. inflation data fueled expectations that the Federal Reserve may adopt a less aggressive monetary stance.

Softer U.S. Inflation Supports Gold, but Rising Oil Prices Offset Optimism

June's U.S. Consumer Price Index (CPI) recorded the first monthly decline in consumer prices since 2020, easing inflation concerns and pushing Treasury yields and the U.S. dollar lower. The softer inflation report prompted traders to reduce expectations of near-term Federal Reserve interest rate hikes, providing significant support for precious metals.

However, market sentiment quickly shifted as crude oil prices resumed their upward momentum. Investors are increasingly concerned that higher energy costs could reignite inflationary pressures, forcing the Federal Reserve to maintain higher interest rates for longer than previously anticipated.

Oil Rally Keeps Federal Reserve Policy in the Spotlight

Crude oil prices extended gains for a third consecutive session after President Donald Trump maintained a naval blockade around Iranian ports and warned of further military escalation unless Tehran returned to negotiations. The heightened geopolitical tensions have intensified concerns over global energy supplies, driving oil prices higher.

Persistently elevated energy prices could complicate the Federal Reserve's efforts to bring inflation back to its long-term target. While gold is traditionally viewed as a hedge against inflation and geopolitical uncertainty, higher interest rates and stronger bond yields typically reduce the appeal of non-yielding assets such as gold.

Federal Reserve officials have welcomed the recent moderation in inflation but continue to emphasize that additional evidence is needed before they can confidently conclude that inflation is moving sustainably toward the central bank's target.

ANZ Sees Limited Near-Term Upside for Gold

Analysts at ANZ expect gold prices to remain range-bound in the short term as expectations for at least one Federal Reserve rate hike this year continue to cap upside momentum. Nevertheless, they believe buying interest is likely to re-emerge during deeper price corrections, arguing that the precious metal's long-term fundamentals remain firmly supportive.

Markets Await U.S. Producer Price Data

Investors are now turning their attention to the upcoming U.S. Producer Price Index (PPI) report, which could provide fresh insights into inflation trends and the Federal Reserve's next policy move.

According to the CME FedWatch Tool, markets currently assign a 58% probability of a Federal Reserve interest rate hike in September, down from approximately 76% before Tuesday's softer CPI report, highlighting the market's evolving expectations for U.S. monetary policy.

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Gold Above $4000

 

Gold Recovers Above $4,000 as Markets Await US CPI Data and Fed Chair Warsh Testimony

Gold prices extended their intraday recovery on Tuesday, climbing back above the $4,000 mark after touching their lowest level in nearly two weeks during the Asian session. The rebound was supported by a pause in the US dollar's two-day rally as investors turned cautious ahead of the release of the latest US Consumer Price Index (CPI) report and Federal Reserve Chair Kevin Warsh's testimony before Congress.

The weaker US dollar provided short-term support for bullion, although broader market sentiment remains cautious as traders assess the outlook for inflation and future Federal Reserve interest rate decisions.

Gold Technical Outlook Remains Bearish Despite Recovery

From a technical perspective, gold continues to trade well below its 200-day Simple Moving Average (SMA), maintaining a broader bearish outlook within a descending channel pattern.

Momentum indicators suggest selling pressure is beginning to ease. The Moving Average Convergence Divergence (MACD) has turned slightly positive, indicating that bearish momentum is fading. However, the Relative Strength Index (RSI) remains around 39, below the neutral 50 level, suggesting that the current rebound is still fragile rather than the start of a confirmed bullish reversal.

Any further upside is likely to face strong selling pressure around the $4,100 resistance level. A sustained breakout above that area could trigger short-covering activity and lift gold toward the upper boundary of the descending channel near $4,221.

Additional buying momentum could then target the key 200-day SMA at $4,495.01. A decisive move above this level would invalidate the current bearish outlook.

On the downside, immediate support is located near $3,761.01, around the lower boundary of the channel. A decisive break below this level could accelerate losses and expose deeper downside risks.

US CPI and Fed Testimony Take Center Stage

Escalating tensions between the United States and Iran, combined with growing expectations for another Federal Reserve rate hike, have continued to support the US dollar, prompting traders to remain cautious about chasing further gains in gold.

Markets are now focused on the release of the US Consumer Price Index (CPI) later today. Headline inflation is expected to ease, largely reflecting lower gasoline prices during June. However, investors will pay closer attention to the Core CPI, which excludes volatile food and energy prices and is considered the Federal Reserve's preferred gauge of underlying inflation trends.

Adding to market volatility, Federal Reserve Chair Kevin Warsh is scheduled to deliver his first semiannual monetary policy testimony before the House Financial Services Committee. His comments are expected to provide fresh guidance on the Fed's interest rate outlook and could significantly influence short-term movements in both the US dollar and gold prices.

Middle East Conflict Keeps Inflation Risks Elevated

Meanwhile, renewed geopolitical tensions continue to support safe-haven demand while also boosting energy prices.

The closure of the Strait of Hormuz and escalating military confrontation between the United States and Iran pushed crude oil prices to their highest level in nearly a month, reigniting concerns that higher energy costs could keep inflation elevated and force the Federal Reserve to maintain restrictive monetary policy for longer.

The US military launched a third consecutive night of strikes against Iranian targets after President Donald Trump reinstated a naval blockade on Iranian ports. In response, Iran's Islamic Revolutionary Guard Corps (IRGC) targeted US facilities across the region, while two UAE oil tankers were reportedly struck by Iranian cruise missiles in the Strait of Hormuz.

The escalating conflict prompted traders to quickly price in additional geopolitical risk, strengthening demand for the US dollar.

Despite gold's latest rebound, the overall fundamental backdrop suggests that rallies may continue to attract sellers. As a result, the XAU/USD pair remains vulnerable to another decline toward its year-to-date low around $3,943–$3,942, last recorded on June 30.

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Gold Below $4100

Gold Price Trims Losses but Remains Below $4,100 as Hawkish Fed Bets Limit Recovery

Gold prices recovered part of their intraday losses during the first half of the European session on Tuesday, although the precious metal remained under pressure for a second consecutive day and continued trading below the key $4,100 level. A modest pullback in the US Dollar (USD) provided temporary support for bullion, but the broader market backdrop continued to favor sellers, limiting any meaningful upside.

From a technical perspective, XAU/USD remains firmly below its 200-day Simple Moving Average (SMA) while continuing to trade within a descending parallel channel, reinforcing the prevailing bearish trend. Meanwhile, the Relative Strength Index (RSI) hovers around the 40 mark, suggesting weak momentum, while the Moving Average Convergence Divergence (MACD) histogram remains slightly positive despite easing from recent highs. These indicators point to only moderate downside momentum but fail to signal a sustained bullish reversal.

Gold Technical Outlook: Key Support and Resistance Levels

The first major support level is located at the psychologically significant $4,000 mark, followed by the year-to-date low near $3,942. A decisive break below this area could expose the lower boundary of the descending channel around $3,782.83, where bargain hunters may attempt to stabilize prices if selling pressure intensifies.

On the upside, immediate resistance is seen at the upper boundary of the channel near $4,291.51. A sustained move above this level would be required to weaken the current bearish outlook. However, the more significant resistance remains the 200-day SMA around $4,494.65, which must be reclaimed before confirming a longer-term bullish trend reversal.

Middle East Conflict Fuels Inflation Fears and Supports Hawkish Fed Expectations

Geopolitical tensions escalated over the weekend after the United States launched large-scale strikes against Iran, prompting Tehran to retaliate with missile attacks targeting U.S. military bases in the Gulf region. In addition, Iran's Islamic Revolutionary Guard Corps (IRGC) reportedly attacked another commercial vessel in the Strait of Hormuz and declared the strategic waterway closed.

The renewed conflict has intensified uncertainty across global energy markets, driving crude oil prices sharply higher and reviving concerns over energy-driven inflation. Rising oil prices have strengthened market expectations that the Federal Reserve may need to maintain higher interest rates or even tighten monetary policy further to contain inflationary pressures.

According to the CME Group FedWatch Tool, traders are currently pricing in nearly a 90% probability of another Federal Reserve interest rate hike before the end of the year. This outlook continues to support higher U.S. Treasury yields and has helped the U.S. dollar rebound from last week's multi-day lows, reducing the appeal of non-yielding assets such as gold.

However, USD bulls remain cautious ahead of fresh economic data and comments from Federal Reserve officials. Investors are particularly focused on Federal Reserve Chair Kevin Warsh's congressional testimony later this week for additional guidance on the central bank's policy outlook.

US Inflation Data Could Determine Gold's Next Move

Market participants are also closely watching the release of the U.S. Consumer Price Index (CPI) on Tuesday, followed by the Producer Price Index (PPI) on Wednesday. These key inflation reports are expected to play a crucial role in shaping expectations for future Federal Reserve policy and influencing short-term movements in both the U.S. dollar and gold prices.

A stronger-than-expected inflation reading would likely reinforce expectations for tighter monetary policy, boosting the dollar and putting additional pressure on XAU/USD. Conversely, weaker inflation figures could ease concerns over further rate hikes, providing temporary support for gold.

Despite the potential for short-term volatility, the broader fundamental backdrop remains unfavorable for bullion. As long as expectations for a hawkish Federal Reserve persist and geopolitical tensions continue to support higher energy prices, any recovery in gold is likely to face selling pressure and remain limited.

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Gold Faces Pressure

Gold Price Vulnerable Near $4,100 as Fed Rate Hike Bets and Iran Risks Pressure Bullion

Gold prices remained under pressure near the $4,100 level during the European session as investors weighed expectations for additional Federal Reserve rate hikes alongside renewed geopolitical tensions between the United States and Iran.

The precious metal slipped to a fresh intraday low in early European trading, with sellers attempting to extend losses below the key $4,100 support level. Although the U.S. Dollar had weakened following Wednesday's less-hawkish FOMC Minutes, the greenback recovered from its one-week low, supported by growing expectations of Fed interest rate hikes in 2026 and persistent geopolitical uncertainty.

From a technical perspective, gold continues to trade within a broader descending channel and remains below its 200-day Simple Moving Average (SMA), keeping the short-term outlook bearish despite signs of improving momentum. The upper boundary of the channel near $4,156.03 represents the first major resistance level, while the 200-day SMA, currently positioned around $4,493.66, reinforces a strong technical ceiling above spot prices.

Momentum indicators suggest a potential corrective rebound. The Moving Average Convergence Divergence (MACD) histogram has turned positive, with the MACD line crossing above the signal line, indicating that bullish momentum is gradually improving within the broader downtrend. However, the Relative Strength Index (RSI) remains near 45, signaling only moderate buying interest rather than a decisive bullish reversal.

On the downside, today's swing low around $4,109–$4,108 serves as immediate support. A stronger support zone lies near the lower boundary of the descending channel at approximately $3,758.88, where buyers could return if selling pressure intensifies.

Fed Rate Hike Expectations Continue to Weigh on Gold

Growing expectations that the Federal Reserve could raise interest rates in 2026 continue to pressure bullion, suggesting that gold's recent rebound from the $4,020 area—its one-week low recorded on Wednesday—has started to lose momentum.

The June 16–17 FOMC Minutes, released on Wednesday, revealed that policymakers remain divided over the future path of monetary policy. While several officials indicated that the federal funds rate could finish the year within or slightly below the current target range, many also acknowledged that additional policy tightening may still be necessary if inflation risks remain elevated.

According to the CME FedWatch Tool, traders continue to price in nearly an 85% probability of at least one Federal Reserve interest rate hike before the end of the year, reinforcing expectations that higher borrowing costs could limit gold's upside potential.

US-Iran Conflict Keeps Safe-Haven Demand Alive

Fresh military tensions between the United States and Iran have once again shifted investor attention toward rising oil prices and their potential impact on global inflation and monetary policy.

The U.S. Central Command (CENTCOM) confirmed that American forces carried out airstrikes on Thursday targeting approximately 90 Iranian military sites, including air defense systems, missile installations, and naval logistics facilities along Iran's coastline. In response, Iran launched missiles and drones targeting U.S. military installations in Bahrain and Kuwait while warning that additional American attacks would trigger a broader regional response, further complicating diplomatic efforts.

Despite the escalation, market sentiment improved slightly after U.S. President Donald Trump told reporters that Iran had reached out to negotiate a deal with Washington. A White House official also reaffirmed that the United States remains committed to the existing memorandum of understanding with Iran.

These mixed geopolitical signals have left investors cautious, suggesting that stronger follow-through buying will be required to confirm that gold has established a short-term bottom. Even so, XAU/USD remains on track to post a modest weekly loss as traders continue to monitor developments surrounding the evolving US-Iran conflict and the Federal Reserve's policy outlook.

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Gold Prices Slip

Gold Prices Slip as Iran Tensions Strengthen US Dollar

Gold prices edged lower on Thursday as a stronger US Dollar continued to weigh on the precious metal following renewed military tensions between the United States and Iran. Escalating geopolitical risks have fueled concerns over persistent inflation, reinforcing expectations that interest rates could remain elevated for longer.

Meanwhile, the minutes from the Federal Reserve's June policy meeting provided little support for gold, revealing that policymakers remain divided over whether additional interest rate hikes will be necessary this year.

Spot gold fell 0.2% to $4,070.81 per troy ounce, while gold futures slipped 0.1% to $4,079.47 per ounce as of 09:46 GMT.

Gold has now posted losses for three consecutive sessions after renewed US-Iran military activity pushed crude oil prices sharply higher. Rising energy costs have intensified concerns that inflation could remain stubbornly high, prompting investors to expect the Federal Reserve to maintain restrictive monetary policy for an extended period.

The US Dollar benefited from these inflation concerns, with the US Dollar Index remaining close to the 13-month high reached in June.

"Any sustained recovery in energy prices would reinforce expectations that the Federal Reserve may keep interest rates higher for longer to combat persistent inflation," ANZ analysts said in a research note.

Military tensions escalated earlier this week after the United States launched a series of strikes against Iran. President Donald Trump also declared that the ceasefire with Iran had ended, following Iranian attacks targeting vessels attempting to pass through the Strait of Hormuz.

Other precious metals also traded mostly lower, extending recent declines alongside gold. Spot silver dropped 0.5% to $58.0060 per ounce, while spot platinum gained 0.5% to $1,594.00 per ounce.

Fed Minutes Highlight Inflation Concerns

The Federal Reserve's June meeting minutes, released on Wednesday, suggested that policymakers remain divided over the need for additional interest rate increases in 2026. While opinions differed on the policy outlook, officials broadly acknowledged that inflation remains a significant challenge.

The minutes also revealed growing concern among Fed officials that persistent inflationary pressures could eventually justify another rate hike later this year, particularly if price growth shows little sign of easing.

US inflation has accelerated noticeably since the outbreak of the US-Iran conflict in late February, with consumer prices continuing to run well above the Federal Reserve's long-term 2% inflation target.

Federal Reserve Chair Kevin Warsh recently reiterated the central bank's commitment to restoring inflation to its target, emphasizing that policymakers remain prepared to keep monetary policy restrictive until inflation returns to sustainable levels.

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