Gold price exceeds 4,100 USD/ounce
In the trading session on July 22, world gold prices continued to rise, at times reaching their highest level in about two weeks. The upward momentum came from technical buying activities, closing selling positions and the need to find safe assets in the face of unpredictable developments in the Middle East.
Previously, in the last trading session of July 21 in the US, spot gold prices fluctuated in the range of 3,998.8 - 4,087.3 USD/ounce. At one point, the precious metal was traded around 4,080.2 USD/ounce, up 1.83% compared to the previous session.
The rapid return above the 4,000 USD/ounce threshold shows that buying power appears quite strongly whenever gold prices fall into this support zone. The price also surpasses the technical zone of 4,041.65-4,002.4 USD/ounce, thereby improving short-term prospects.
However, the upward momentum still faces many resistance forces. The USD index remained around 101.22 points, while the yield of 10-year US government bonds approached 4.63%. These are all factors that often reduce the attractiveness of gold because the precious metal does not bring a fixed yield.
Middle East tensions continue to dominate the market
Investors are closely monitoring developments related to the conflict between the US and Iran, as well as risks to transportation through the Strait of Hormuz and the Red Sea.
Brent oil closed the session around 91.01 USD/barrel, while US WTI oil reached about 84.91 USD/barrel. High oil prices created opposite effects on gold.
On the one hand, geopolitical tensions and the risk of supply disruptions boost safe-haven demand. On the other hand, high energy prices could increase inflation, forcing the US Federal Reserve (Fed) to maintain tight monetary policy for a longer time.
Market awaits signal from Fed
Investor attention is gradually shifting to the Fed policy meeting scheduled for July 29. The market expects the meeting to provide more signals about interest rate prospects in the last months of the year.
According to the CME FedWatch tool, the market is assessing the possibility of the Fed raising interest rates in September at around 67%. The possibility of interest rates remaining high is one of the biggest risks for gold prices.
In the short term, gold prices need to maintain stability above the 4.072 USD/ounce zone to strengthen the recovery trend. If it returns below the 4.041 USD/ounce zone, pressure from bond yields and the USD may dominate the market.
In addition to the Fed meeting, investors will monitor preliminary US purchasing managers' index reports, oil price movements and new information related to transportation through the Straits of Hormuz and the Red Sea.
On the precious metals market, spot silver prices increased by 0.7% to 59.2135 USD/ounce. Platinum prices increased by 0.8%, reaching 1,642.74 USD/ounce, while palladium increased by about 1%, to 1,294.19 USD/ounce.
Information in the article only reflects market developments at the time of recording, not investment recommendations.
