Gold Stalled as Iran Risks and Fed Outlook Loom
Gold prices traded within a narrow range above US$4,065 per troy ounce during Tuesday's Asian session (August 4). Market participants remained reluctant to take large positions while awaiting developments regarding the US-Iran conflict and the Federal Reserve's interest rate policy direction.
The US dollar has struggled to sustain a strong recovery from its mid-June lows. While this has helped curb gold's decline, diplomatic uncertainty between Washington and Tehran continues to support demand for the dollar as a safe-haven asset.
Hopes for peace faded again after Iran denied the existence of negotiations with the US. Tensions escalated following reports that Iran's Revolutionary Guard attacked a US military base in Kuwait using drones, while Tehran rejected claims that the Strait of Hormuz would soon fully reopen.
Recovering oil prices have also fueled inflation concerns. Markets anticipate that rising energy costs could prompt the Fed to maintain a tight policy stance or hike interest rates again, thereby limiting the appeal of non-yielding assets like gold.
Hawkish expectations were further reinforced by US ISM Manufacturing data, which climbed to its highest level in over four years. A resilient economy affords the Fed greater leeway to combat inflation without excessive concern over a growth slowdown.
Newsmaker Analysis: Gold remains under pressure as long as it stays below the US$4,080–US$4,100 range. The US$4,050 level serves as initial support, followed by the US$4,020–US$4,000 zone. Market focus is now shifting to Friday's Nonfarm Payrolls report, which could determine the future trajectory of the dollar, bond yields, and gold prices. (asd)*
Source: Newsmaker.id
