Gold Stable, FOMC Key
Gold prices moved steadily in Asian trading on Wednesday (July 8) after a sharp decline in the previous session. The market is still digesting renewed tensions between the United States and Iran, while awaiting the minutes of the Federal Reserve's June meeting.
Spot gold rose 0.3% to US$4,117.82 per troy ounce at 02:32 GMT. Meanwhile, gold futures fell 0.7% to US$4,127.59 per troy ounce. Previously, the spot gold price had fallen 1.6% on Tuesday.
Pressure on gold emerged after the United States launched a new attack on Iran and revoked restrictions on Iranian oil exports. This move was taken in response to attacks on ships passing through the Strait of Hormuz, one of the world's most important energy routes.
This escalation sent oil prices soaring and rekindled concerns about energy-based inflation. If oil prices continue to rise, inflationary pressures could persist for longer. This could prompt the Fed to maintain high interest rates or even open the door to a rate hike.
For gold, the situation is quite complicated. On the one hand, geopolitical tensions typically support demand for gold as a safe haven asset. However, on the other hand, the risk of inflation and high interest rates pose significant pressure because gold does not provide returns like bonds.
The market's primary focus is now on the minutes of the Fed's June meeting. Investors want to see whether the Fed maintains its hawkish tone under new Chairman Kevin Warsh. If the minutes indicate a longer-term high interest rate environment, gold could be under pressure again. However, if the Fed appears more cautious after weak US employment data, gold could attempt a rebound. (asd)*
Source: Newsmaker.id
