Gold Rises, Pause in Conflict Eases Interest Rate Pressure
Gold prices strengthened on Monday (July 27th) after a pause in attacks between the United States and Iran weighed on oil prices. Spot gold rose 0.9% to US$4,089.03 per troy ounce.
US gold futures for August delivery also rose 0.5% to US$4,090.80. Falling energy prices helped ease concerns about inflation and the risk of rising interest rates.
Iran stated that it would halt attacks as long as the United States also halted its military operations. This news raised hopes that the conflict around the Strait of Hormuz could be resolved through diplomacy.
Oil prices fell more than 6% on Monday. The US Dollar Index also weakened 0.2%, making gold more affordable for buyers using other currencies.
Investors now await the Federal Reserve's interest rate decision on Wednesday. Around 66% of market participants expect the Fed to keep rates unchanged, while the chance of a September rate hike is around 77%.
As long as oil prices, the dollar, and US bond yields remain low, gold has the potential to maintain its strength. However, the future price direction still depends on developments in the Iran conflict and the Fed's statement regarding interest rate policy.
Source: Newsmaker.id
