Weaker Dollar Boosts Gold, Geopolitics Limit Crude Gains

Gold prices are expected to maintain their positive momentum due to a weaker dollar and fading expectations of a near-term US rate hike, according to a report by Kotak Neo. Spot gold extended its two-week rally, rising 0.5% intraday before paring gains to around $4,400 an ounce.

The dollar declined 0.2%, while a steeper Treasury yield curve fueled expectations that the Fed is unlikely to adopt an aggressively hawkish stance in the near term. Geopolitical tensions, including renewed Strait of Hormuz attacks and possible US measures against Iran, continued to support bullion.

Brent crude prices remain moderately positive due to escalating geopolitical risks, but strong Gulf exports and weak demand are likely to limit gains, pulling prices towards $80/bbl, Kotak noted. The market is balancing escalating geopolitical risks against continued physical supply flows and concerns over demand.