Gold Price Hits Pause as Market Awaits Inflation Data and Hormuz Resolution
The gold market has experienced an unexpected surge over the past week, reaching $4,405 per ounce before hitting a pause. The sudden increase was triggered by a shock US payrolls print, which revealed a 23,000 job loss instead of the expected gain of 80,000. This led to a collapse in the probability of a September rate hike from 67% to around 44%, making gold more attractive as investors sought safer assets.
The Strait of Hormuz crisis has also contributed to the market's volatility, with Iran warning that any agreement on shipping routes through the strait won't lead to an immediate reopening. This ambiguity has maintained a bid under the market, and Brent crude prices have risen due to concerns over potential disruptions in oil trade.
The technical picture of gold remains positive, with the Relative Strength Index at 66.7 indicating that the metal is not yet overbought. Support levels lie between $3,960 and $4,000, while a breakout above $4,200 could lead to further gains.