Gold Prices Soar on Weaker Dollar and Geopolitical Tensions
Gold prices have surged due to a weaker US dollar and rising geopolitical tensions in the Middle East. The Federal Reserve kept interest rates unchanged at 3.50%-3.75%, with Chair Kevin Warsh reiterating the central bank's commitment to controlling inflation.
The recent military action between the United States and Iran has heightened safe-haven demand for gold, despite expectations that interest rates could remain elevated. Markets are currently pricing in a 65% probability of a September rate hike, down from nearly 81% before the Fed meeting, according to CME FedWatch.
India's physical market remained subdued due to higher domestic prices, but buying interest in China improved, with gold trading at premiums of $3-$6 per ounce over global spot prices. Gold holdings in London vaults increased 0.77% to 9,464 tonnes at the end of June.