Gold Recovers Slightly, Fed's Hawkish Signals Limit Gains
Gold prices rose slightly on Thursday (June 17), recovering some of the previous session's losses as investors weighed the interim US-Iran peace deal and hawkish signals from the Federal Reserve. Spot gold rose 0.3% to $4,269.42 an ounce at 5:46 a.m. ET, while gold futures fell 2.1% to $4,288.72 an ounce.
In the previous session, gold fell 1.7% as the US dollar strengthened and Treasury yields rose following the Fed's latest decision. The US central bank kept interest rates in a range of 3.50% to 3.75% but signaled that a rate hike was still possible this year.
Gold's support came from optimism surrounding the US-Iran deal. The 14-point memorandum began a 60-day negotiating period, with Iran allowing free passage through the Strait of Hormuz. The deal also aims to return traffic through the strait to full capacity within 30 days.
These developments help ease concerns about a prolonged oil supply shock. If energy prices are more manageable, inflationary pressures from the oil sector could ease, supporting interest in gold as a portfolio hedge.
However, gold's gains remain limited as the Fed's latest projections show nine out of 19 officials expect at least one interest rate hike in 2026. In his first meeting as Fed Chair, Kevin Warsh reiterated the central bank's commitment to restoring price stability.
For the gold market, the combination of a stronger dollar and expectations of higher interest rates poses a major headwind. Gold offers no yield, so its appeal tends to diminish when yields rise. The focus now turns to the direction of the US dollar, Treasury yields, developments in Hormuz, and the upcoming US inflation data. (arl)
Source: Newsmaker.id
