Taiwan Bank Flags Hawkish Fed, Oil Prices as Gold Price Risks

The Bank of Taiwan has forecast that gold prices will face competing pressures this week due to various market factors. Gold has been trading within a narrow range since late June, hovering around NT$132,481 (US$4,100) per troy ounce. The bank expects international gold prices to be influenced by Middle East tensions, oil-driven inflation concerns, and the US Federal Reserve's interest rate decision.

The Fed's meeting later this week is expected to be a key factor in determining the direction of gold prices. Markets generally expect the Fed to keep interest rates unchanged, but a more hawkish stance could weigh on gold. A pause in US military action against Iran ahead of the Fed meeting could also ease concerns over renewed inflationary pressure and support gold.

On the other hand, continued selling by Russia's central bank and higher oil prices linked to US-Iran tensions are weighing on gold prices. If gold holds above the key US$4,000 level, prices are likely to consolidate between US$3,950 and US$4,150 before attempting another move higher.