Gold Consolidates Near $4,400 as Oil Prices Drop and Inflation Pressure Eases
Gold prices (XAUUSD) continued to consolidate at high levels on September 21, after rebounding strongly from last week's lows. The current price is around $4,360, a key level of resistance sits just above at $4,400.
The Federal Reserve's rate hike has been the primary driver of gold price trends in the near term. Fed officials remain hawkish on inflation, with Minneapolis Fed President Neel Kashkari stating that US inflation remains too high across multiple sectors of the economy and supporting further rate hikes.
However, falling oil prices have eased pressure for further rate hikes, providing some support for gold prices. Crude oil prices fell by over 1.5% on September 21, with WTI crude (USOIL) briefly dropping to $94 and Brent crude (UKOIL) reaching around $101.71.
Gold's upside potential remains capped by hawkish comments from Fed officials, but if oil prices continue to retreat and US Treasury yields decline accordingly, conditions for gold to break back above $4,400 will improve.