Gold Prices Slip from Three-Day Highs Amid Ongoing Conflict and Rate Hike Uncertainty
Gold prices have retreated from three-day highs near $4,450, but remain poised for further gains as market participants await the release of the Federal Reserve's minutes on Wednesday. The US-Iran stalemate has contributed to a renewed buying wave in oil prices and higher US Treasury bond yields.
The US 30-year Treasury bond yield climbed to 5.321%, its highest level since mid-2007, as investors seek safe-haven assets amid the ongoing conflict. However, strategists at Scotiabank believe that the retreat in Fed tightening expectations and steeper yield curve will put pressure on the US Dollar (USD) in the near-term.
With a 30% chance of a rate hike next month priced in by markets, down from 50% a week ago, Gold remains well-supported. Scotiabank notes that 'the USD got roughed up a bit last week and Dollar trends continue to soften broadly this morning,' pushing the DXY below its August consolidation range.
Gold's technical analysis suggests a constructive bullish bias, with spot holding above a dense floor of moving averages. The Relative Strength Index (14) hovers near 64, just shy of overbought territory, indicating that buyers remain in control but may face fatigue if gains extend too quickly.