Gold prices were steady near $4,400 an ounce, experiencing minor fluctuations after giving up 1.5% over the past two trading sessions. The precious metal's movement is being influenced by conflicting factors, primarily heightened tensions in the Middle East and a decline in the US dollar against the Japanese Yen. Renewed clashes between the US and Iran in the Strait of Hormuz are driving up oil prices and intensifying inflationary concerns.
Traders are now pricing in approximately a 60% likelihood that the Federal Reserve will implement an interest rate hike as early as next week. This expectation was reinforced by stronger-than-expected US payrolls data released last week, which eased concerns about the labor market and gave the Fed more flexibility to focus on inflation. The upcoming US Producer Price Index on Thursday and the Consumer Price Index on Friday are crucial data points that could either validate or ease these rate hike expectations.
Spot gold was trading around $4,392.60 an ounce, down 0.28%, while spot silver was at $65.740, down 0.47%. Oil prices are on the rise, with Brent crude trading between $98.50 and $99.20 a barrel, and WTI between $93.80 and $94.40. These rising oil prices, fueled by attacks on Saudi energy infrastructure and US-Iran escalation, contribute to inflationary pressure, which typically supports the case for higher interest rates. The two-year Treasury yield is near 4.36%, the 10-year yield is near 4.78% to 4.81%, and the 30-year yield is near 5.27%.
