Oil Surges Past $100, Gold Prices Under Pressure from Escalating Tensions
Oil prices have surged past $100 per barrel for the first time since May due to escalating tensions in the Middle East, specifically between the US and Iran. The conflict has led to a sharp increase in energy prices, with Brent crude oil prices above $100 per barrel.
The rising energy prices, combined with strong US labor market data that showed initial jobless claims fell to a multi-decade low of 187,000, have intensified fears of resurgent inflation. This has increased the likelihood of a Fed rate hike at the July 28-29 meeting, with swap traders pricing in a 34% probability.
Gold prices are under pressure from these developments, with spot gold consolidating weakly around $4,050 per ounce after plunging 2% the previous day. Analysts at TD Securities noted that gold's recent rebound feels primarily flow-driven and may not mark the beginning of a new structural trend.