Gold Breaks Two-Week Losing Streak Amid Soaring Oil Prices
Gold prices ended a two-week losing streak on Friday after technical buying at the $4,000/oz level offset inflationary pressures. The metal ticked up 0.1% to settle at $4,052.98/oz and gold futures added 0.1% as well to settle at $4,055.25/oz.
The rebound came despite a strong dollar amid soaring oil prices. The global benchmark, Brent crude, topped $100 a barrel for the first time since May, with a more than 25% jump in two weeks. This surge was driven by rising tensions between the US and Iran, as well as attacks on Saudi Arabian tankers in the Red Sea.
According to David Morrison, senior market analyst at Trade Nation, gold found support around the key psychological level of $4,000/oz. However, he noted that lower cycle lows remain a danger for the bulls, and gold will need to break above $4,200 with real conviction to spark the market into life again.
The odds of the Federal Reserve holding rates steady at its upcoming monetary policy committee meeting next week stand at about 62%, versus around 87% a week ago. The odds of a quarter-point hike have ticked up to nearly 38% from around 13% a week ago.