Gold Edges Higher as US Yields Ease, but Hawkish Fed Caps Upside
Gold prices rose to a fresh weekly high on Friday as US bond yields eased from multi-year highs. The decrease in yields reduced support for the US Dollar, but the Federal Reserve's hawkish bias continued to underpin the currency and limit upside in gold.
The Fed voted unanimously at its September meeting to lift rates for the first time since 2023, with a dot plot pointing to one additional increase this year. CME Group FedWatch data put the odds of a hike at 54% in October and about 88% in December.
Iran's Islamic Revolutionary Guard Corps said it struck a Togo-flagged tanker in the Strait of Hormuz, while US President Donald Trump said he was nearing a decision on whether to resume large-scale attacks on Iran. The tensions in the Middle East may fuel inflation, which would strengthen the Fed's hawkish case and support the greenback.
Technically, gold has stalled near the 100-day Exponential Moving Average (EMA) at $4,368, keeping the near-term bias bearish despite holding above Fibonacci support. The price sits just above the 50.0% retracement at $4,320, with the Relative Strength Index (RSI) at 49.52 near neutral.