Gold Holds Firm Amidst Inflation Threats
Gold prices maintained their gains, hovering around US$4,060 per troy ounce during Thursday's trading (July 29). The XAU/USD pair had previously surged to US$4,116.26—its highest level since July 23—after the Federal Reserve once again held interest rates steady.
The Fed maintained the interest rate range at 3.50%–3.75% for the fifth consecutive meeting. The decision was reached via a 9-to-3 vote, with Beth Hammack, Neel Kashkari, and Lorie Logan favoring a 25-basis-point hike.
Gold found support as the US Dollar Index fell approximately 0.57% to 100.83. A weaker dollar made gold—priced in the US currency—cheaper for overseas buyers and sparked renewed buying interest following selling pressure in the previous session.
However, gold's gains began to trim as the bond market remained skeptical of the Fed's ability to control inflation without raising interest rates. The yield on the 10-year US Treasury hovered around 4.65%, while the 30-year yield briefly breached 5.20%, hitting its highest level since 2007.
Middle East tensions also sustained demand for safe-haven assets. Brent crude prices surged 7.91% to US$90.74 per barrel, while WTI rose 6.56% to US$84.46, after US and Saudi strikes against Iran-backed groups heightened the risk of energy supply disruptions.
Consequently, gold remains supported by a weaker dollar, geopolitical risks, and concerns over energy-driven inflation. However, high bond yields and the possibility of an interest rate hike in September could limit further gains. Markets will next focus on US PCE inflation data; a higher-than-expected reading could pressure gold, whereas softer data might pave the way for a return to the US$4,100–US$4,116 range. (arl)
Source: Newsmaker.id
