Gold Drops Below US$4,400 as US Dollar Strengthens Again
Gold prices weakened during Asian trading on Tuesday (August 18), falling to US$4,393 per troy ounce. Downward pressure on the XAU/USD pair emerged as the US dollar continued its rebound from a two-month low, bolstered by inflation concerns stemming from rising oil prices.
Market sentiment remains influenced by expectations that the Federal Reserve might raise interest rates at least once in 2026. Rising energy prices are seen as a potential trigger for renewed inflationary pressure, keeping US Treasury yields elevated—a headwind for non-yielding assets like gold.
US-Iran tensions have also bolstered demand for the US dollar as a safe-haven asset. US President Donald Trump stated that Iran must capitulate to end a conflict that has lasted nearly six months. He also declared that the US would not extend the memorandum of understanding with Iran, which expired on Monday.
Geopolitical risks have intensified following the expansion of attacks on Saudi Arabia by the Iran-backed Houthi group in Yemen. The Houthis claimed to have targeted a Saudi military vessel and several patrol boats near Mokha, potentially disrupting the Bab el-Mandeb shipping lane and heightening concerns regarding global energy supplies.
Regarding market impact, gold could remain under pressure as long as the US dollar and Treasury yields are supported by energy-driven inflation risks. However, the decline in XAU/USD is likely to be limited, as Middle East tensions continue to sustain demand for safe-haven assets. Attention now shifts to the release of the FOMC minutes on Wednesday, which could offer fresh clues on the Fed's policy direction and serve as a key catalyst for gold price movements. (asd)*
Source: Newsmaker.id
