Gold Reverses Gains as US Dollar Recovers and Oil Prices Rise
Gold's early gains have been erased as the US Dollar has made a modest recovery and oil prices continue to rise. The precious metal had reached an intraday high near $4,443 but is now trading around $4,400.
The US Dollar Index (DXY) has recovered from its lowest level since August 21, reaching 98.97 after the latest hostilities in the Middle East intensified tensions between the US and Iran. The escalation of violence has also driven up oil prices, with West Texas Intermediate (WTI) trading around $91.80 per barrel.
The near-term outlook for gold remains challenging due to expectations of a potential interest rate hike by the Federal Reserve. Traders are paying greater attention to how higher oil prices could affect inflation and interest rates, making gold's traditional role as a hedge against these factors less reliable.