Gold Falls as Fed Hike Bets Stay Firm Amid US-Iran Tensions
Gold prices retreated on Friday, snapping a two-day winning streak, as the US Dollar regained traction and interest rate hike bets stayed firmly in place. The non-yielding bullion struggled to break above $4,100, weighed down by inflation risks from volatile crude oil prices.
The US data released on Thursday showed moderating economic growth and signs of cooling inflation, tempering bets for an immediate Federal Reserve rate hike. The first estimate published by the Bureau of Economic Analysis revealed that the US economy expanded at an annual rate of 1.5% in the second quarter, down from 2.1% in the previous quarter.
Meanwhile, the US-Iran standoff and concerns about disruptions to global energy supplies continued to support crude oil prices, keeping inflation a concern for investors. The CME FedWatch Tool showed that traders still priced in an over 85% chance of a rate hike by the end of this year, supporting elevated US Treasury bond yields and reviving USD demand.