Gold prices eased on Thursday after reaching a two-week high in the previous session, as escalating tensions in the Middle East drove oil prices higher. Investors are now turning their attention to next week’s U.S. Federal Reserve meeting for clues on the timing of any future interest rate increases.
Spot gold was little changed at $4,132.01 per ounce, after climbing to $4,165.87 in the previous session—its highest level since July 7. Meanwhile, U.S. gold futures for August delivery fell 0.4% to $4,134.60 per ounce.
Oil prices climbed to their highest levels in more than six weeks after the United States launched another round of airstrikes on Iran and Yemen’s Houthis announced they had targeted two oil tankers in the Red Sea.
The U.S. dollar slipped 0.1%, making dollar-denominated gold less expensive for holders of other currencies.
Meanwhile, yields on two-year U.S. Treasury notes rose to their highest level in 17 months, as higher oil prices fueled concerns that renewed disruptions to global energy supplies could reignite inflation and increase the likelihood of further U.S. interest rate hikes.
The Federal Reserve is widely expected to leave interest rates unchanged at its policy meeting next week.
Similarly, the European Central Bank is almost certain to keep interest rates unchanged on Thursday, although it is expected to leave the door open for another rate increase in September.
Among other precious metals, spot silver rose 0.3% to $59.90 per ounce, platinum gained 0.7% to $1,656.24 per ounce, and palladium advanced 0.8% to $1,301.25 per ounce.
Source: Reuters
