Gold Holds Steady Amid Mideast Tensions, Weaker Dollar
Gold prices remained steady near $4,400 an ounce as traders weighed the effects of Middle East tensions and the decline of the US dollar against the yen. The precious metal was little changed in early trading, having given up 1.5% over the last two sessions.
Renewed clashes between the US and Iran in the Strait of Hormuz have raised oil prices and increased inflationary concerns, with traders pricing in a roughly 60% likelihood that the US Federal Reserve will hike interest rates next week. Tighter monetary policy is typically a headwind for non-yielding gold.
However, supporting gold's prospects, the US dollar dropped to its lowest against the Japanese yen since February. Bullion generally moves in an inverse pattern to the US currency, with a weaker greenback making gold more competitive for buyers.