Gold Prices Consolidate as Strong Dollar and Rate Hike Bets Cap Upside

The price of Gold has consolidated below its recent highs due to the strengthening US Dollar and expectations of a Federal Reserve rate hike. Saudi Arabia's intelligence report indicates that Iraqi militias are coordinating with Houthi rebels in Yemen for an imminent attack on the kingdom, supporting the safe-haven dollar and capping the upside for Gold.

The US-Iran standoff has added to worries about energy supply disruptions, helping crude oil prices preserve their gains. Investors are concerned that elevated oil prices will rekindle inflationary pressures and force major central banks to adopt a more hawkish stance, including the US Federal Reserve.

CME Group's FedWatch Tool indicates an 80% chance of a rate hike by the end of this year, favoring USD bulls. Traders are looking to the upcoming US jobs data for cues about the Fed's policy path and fresh impetus for Gold.