Gold Wavers as Fed Decision Looms Large
Gold prices saw little movement ahead of the Federal Reserve's interest rate decision on Wednesday (July 29). Spot gold rose 0.3% to US$4,041.32 per troy ounce, recovering from a 1.1% drop in the previous session.
Gold's movement remains constrained as the market remains uncertain whether the Fed will hold or raise interest rates. Market participants estimate a roughly one-in-three chance of a 25-basis-point hike.
The Fed faces a difficult choice between lower-than-expected June inflation and rising energy prices driven by the US-Iran conflict. Brent crude surged nearly 4%, breaching US$87 per barrel, following a renewed escalation of tensions in the Gulf region.
The US military stated it had thwarted an Iranian attack on a base in the Persian Gulf region. The renewed conflict heightens risks to energy supplies and could intensify inflationary concerns.
Gold prices have fallen nearly 25% since the US-Iran conflict began over five months ago. Nevertheless, buying on dips has kept the metal hovering near the key US$4,000 level.
If the Fed signals a hawkish stance, gold could face renewed downward pressure below US$4,000. Conversely, a decision to hold rates accompanied by a softer tone could pave the way for a recovery toward US$4,050, while the Middle East conflict continues to provide price support. (asd)*
Source: Newsmaker.id
