Oil Soars Above $100, Gold Defies Expectations
Rising oil prices have pushed the price of Brent Oil above $100 per barrel for the first time since July, but gold has held up well despite expectations that a stronger dollar would make it less attractive. In fact, gold is currently trading around $4,400 per troy ounce, up 8.4% from the beginning of August.
The renewed shelling in the Middle East has put upward pressure on oil prices, which are normally negatively correlated with gold. However, the yellow metal appears to be recovering more quickly than it did earlier this year when the Strait of Hormuz was closed following a conflict between Iran and the US.
US Treasury Secretary Scott Bessent's recent intervention in the currency markets has also contributed to the strengthening dollar, but he has vowed to use his 'inside knowledge' to support the Japanese yen, which has appreciated significantly against the dollar. This is seen as an attempt to prevent Japan from devaluing its currency by selling US Treasuries, which would push up bond yields and increase the cost of servicing US national debt.