Gold Steadies Near $4,400 as Dollar Weakness Offsets Oil-Driven Inflation Concerns

The price of gold steadied near $4,400 as a softer US dollar offset rising energy costs and inflation concerns. The dollar's decline followed a surge in the Japanese yen, with USD/JPY near 153.40, while the US Dollar Index (DXY) traded around 98.61, down about 0.25%.

The West Texas Intermediate (WTI) crude oil price hovered near $93.50 a barrel, close to its highest since June 8, and up about 4.80% this week. This increase in energy prices reinforced concerns about inflation persistence and rates.

Derivative traders are advised to prepare for heightened volatility over the next two weeks as gold consolidates near the crucial $4,400 mark. With a 60% probability of a Federal Reserve interest rate hike at the September 15-16 meeting, option pricing for gold contracts is anticipating a sharp directional move.