Tensions in the Middle East Send Oil Prices Soaring
The recent tensions in the Middle East have pushed oil prices up by over 1% as traders bet on the closure of the Strait of Hormuz for weeks.
This has led to concerns that inflation will rise, forcing the Federal Reserve (Fed) to be more hawkish. However, the FedWatch Tool indicates a 61.6% probability that the Fed will keep rates unchanged at its next meeting in September.
The U.S. dollar is swinging between gains and losses against a broad basket of currencies, which is neutral for gold markets. Currently, gold is trying to settle above the resistance level at $4630-$4650.
If successful, gold will head towards the next resistance in the $4780-$4800 range. On the other hand, a move below $4600 will push gold towards the nearest support at $4480-$4500.