US Inflation Data Fuels Interest Rate Concerns as Iran Tensions Escalate
The recent US inflation data may have some implications for gold prices. The annualized US inflation cooled slightly in July, but stripping out volatile items like energy and food, core inflation rose by 0.2% every month and 2.5% year-on-year, both equaling expectations.
This development could make it more complicated for Federal Reserve policymakers to calibrate interest rates. According to CME FedWatch, investors see a roughly 56% chance that the Fed will opt to keep rates steady in September, while 44% are anticipating a quarter-point rate hike.
Meanwhile, tensions between the US and Iran continue to escalate, with a top adviser to the commander of Iran's Islamic Revolutionary Guard Corps saying that Iran could prolong the war until President Donald Trump is out of office. This has caused oil prices to tick up, with Brent rising around 1% before paring gains.
Gold futures are facing significant selling pressure above $4,494.66, and if they close below the immediate psychological support at $4,444, gold futures could experience a surge in exhaustion during the next two trading sessions this week.