Gold Stabilizes Near One-Month High as Iran Deal Optimism Reduces Fed Hike Bets
Gold prices have stabilized near their one-month high of $4,170 as investors' optimism about a potential US-Iran deal and the reopening of the Strait of Hormuz has reduced bets on a Federal Reserve rate hike. This decrease in Fed rate hike expectations is undermining the US dollar, supporting gold prices for the second consecutive day.
The latest developments in the Middle East crisis have tempered investors' concerns about inflation and hawkish monetary policy from the Fed. However, traders still anticipate a 80,000 new jobs in the upcoming Nonfarm Payrolls report on Friday, which could hold back dollar bears from aggressively betting against the US currency.
Technical analysis suggests that gold's constructive setup supports further gains, with an intraday breakout through the 200-period Exponential Moving Average hurdle validating the positive outlook. However, overbought signals on momentum gauges may cap upside if buying enthusiasm fades, and immediate support is seen at the 200-period EMA near $4,115.