Gold Price Tumbles Below $4,050 Amid US Dollar Rally
The price of gold plummeted by nearly 2% on Thursday as the US Dollar regained strength. The yellow metal fell below $4,050 after reaching a two-day high above $4,100. This decline is attributed to growing speculation that the White House may continue its campaign against Iran, which could prolong the Gulf war.
The US Dollar Index (DXY) rose 0.29% to 101.43, making gold less expensive for foreign buyers. The strong jobless claims report, which showed a decrease from 209K to 187K, justified the Federal Reserve's focus on tackling inflation. Higher oil prices also contributed to the decline in gold prices, as West Texas Intermediate (WTI) rallied about 6% to reach a daily high above $92.00 per barrel.
The probability of a Federal Reserve rate hike at the July 29 meeting increased to close to 40%, while for the September meeting, the odds are at 76%. The US economic docket ahead will feature S&P Global Flash PMIs for July and New Home Sales data for June. Next week's focus will be on the Federal Open Market Committee (FOMC) monetary policy meeting.