Gold Holds High

 

Gold Price Trims Gains, Holds Near Seven-Week High on Hormuz Optimism

Gold prices pared earlier gains on Thursday but remained close to a seven-week high as growing optimism over a potential agreement to reopen the Strait of Hormuz continued to ease inflation concerns and reduce expectations of further monetary tightening by the Federal Reserve.

As of 11:57 WIB (04:57 GMT), spot gold (XAU/USD) rose 0.4% to $4,262.54 per ounce, while Gold Futures gained 0.4% to $4,321.65 per ounce. Meanwhile, silver (XAG/USD) climbed 0.2% to $62.17 per ounce, and platinum (XPT/USD) advanced 1.3% to $1,756.50 per ounce.

Gold Holds Firm Despite Profit-Taking as Hormuz Optimism Supports Sentiment

Gold continued to find support even as traders booked profits, following reports that progress toward a diplomatic agreement involving the Strait of Hormuz could reduce geopolitical risks and stabilize global energy markets.

According to Reuters, a draft agreement between Iran and Oman aimed at ending the five-month conflict between Tehran and Washington would grant Iran authority over vessels entering the Gulf through the Strait of Hormuz. The proposal has raised hopes that disruptions to global energy supplies could ease, helping to improve overall market sentiment.

Crude oil prices declined on expectations that the agreement could reduce tensions in the region and lower the risk of supply disruptions. Softer energy prices have also eased inflation expectations, prompting investors to scale back bets on additional interest rate hikes by the Federal Reserve.

Market pricing now indicates a 55% probability of a Fed rate hike in September, down from approximately 67% earlier this week, reflecting a notable shift in investor expectations.

At the same time, lower U.S. Treasury yields and a weaker U.S. Dollar Index continued to support bullion prices. Since gold does not generate interest, falling bond yields and a softer dollar increase its appeal by reducing the opportunity cost of holding the precious metal.

With geopolitical developments, Federal Reserve policy expectations, and U.S. macroeconomic data remaining in focus, gold prices are likely to stay sensitive to changes in market sentiment in the coming sessions.

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Gold Eyes $4,150

Gold Hits Two-Week High, Targets $4,150 as Fed Rate Hike Expectations Fade

Gold prices (XAU/USD) extended their bullish momentum for a second consecutive session, climbing to their highest level in nearly two weeks around $4,141 during Wednesday's Asian trading session. The precious metal continued to benefit from a weaker U.S. dollar and easing expectations of further Federal Reserve policy tightening amid improving geopolitical sentiment.

Gold Breaks Key Resistance as Bullish Technical Signals Strengthen

From a technical standpoint, gold's daily breakout above the 200-period Exponential Moving Average (EMA) on the four-hour chart reinforces the bullish outlook. The Relative Strength Index (RSI) remains near 65, indicating strong upward momentum without yet reaching extreme overbought territory, while the Moving Average Convergence Divergence (MACD) histogram remains in positive territory, signaling that buyers continue to dominate the short-term trend.

Despite the bullish momentum, the rally may encounter immediate resistance around the $4,130–$4,150 region, where increasingly overbought conditions could slow additional gains if buying interest begins to fade.

On the downside, initial support is located at the 200-period EMA near $4,115. A decisive break below this level could trigger a deeper correction toward the daily low around $4,065, followed by the $4,043–$4,042 support zone, $4,020, and eventually the key $4,000 psychological level.

Hormuz Deal Optimism Reduces Inflation Fears and Pressures the U.S. Dollar

Investor sentiment has improved as markets continue to anticipate a diplomatic breakthrough that could end the five-month conflict between the United States and Iran.

U.S. Treasury Secretary Scott Bessent stated that Washington could reach an agreement with Iran as early as Wednesday to reopen the Strait of Hormuz, helping restore normal shipping operations through one of the world's most strategically important energy corridors.

Separately, Axios, citing sources familiar with the negotiations, reported that the United States, Iran, and Oman are close to finalizing a temporary agreement to reopen the waterway.

Meanwhile, OPEC+ announced on Sunday that it would increase oil production starting in September, easing concerns over global supply disruptions and pushing crude oil prices to their lowest level since June 13.

Lower oil prices have reduced inflation expectations, encouraging investors to scale back bets on additional Federal Reserve tightening. The softer inflation outlook has weighed on the U.S. dollar while increasing demand for non-yielding assets such as gold.

Fed Officials Remain Hawkish Ahead of Key U.S. Employment Data

Despite the recent decline in Fed rate hike expectations, traders continue to price in the possibility of one additional interest rate increase before the end of the year, supported by signs that the U.S. labor market remains resilient.

The latest Job Openings and Labor Turnover Survey (JOLTS) released Tuesday by the U.S. Bureau of Labor Statistics showed job openings slipped slightly to 7.36 million, but remained above levels seen a year earlier, suggesting labor demand continues to hold up.

Federal Reserve officials also maintained a cautious tone. Kansas City Fed President Jeff Schmid and Philadelphia Fed President Anna Paulson both reiterated support for maintaining restrictive monetary policy and keeping interest rates elevated until inflation returns sustainably toward the central bank's target.

Their comments may prevent aggressive bearish positioning against the U.S. dollar ahead of Friday's highly anticipated Nonfarm Payrolls (NFP) report.

ADP Employment and ISM Services PMI in Focus

Looking ahead, investors will closely monitor Wednesday's U.S. economic calendar, including the ADP Employment Report and the ISM Services PMI, for fresh clues on the health of the U.S. economy and the Federal Reserve's policy path.

At the same time, developments surrounding the Middle East crisis are expected to remain a key catalyst for both the U.S. dollar and gold prices.

Overall, the combination of improving technical indicators, easing inflation concerns, and fading expectations of aggressive Fed tightening continues to support the bullish outlook for XAU/USD, leaving the precious metal well-positioned to challenge the $4,150 resistance area in the near term.

SEO Title: Gold Reaches Two-Week High as Fading Fed Rate Hike Bets Boost XAU/USD Toward $4,150

Meta Description: Gold climbs to a two-week high near $4,141 as easing Fed rate hike expectations, weaker U.S. dollar, Hormuz deal optimism, and bullish technical signals drive XAU/USD toward the $4,150 resistance. 

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Gold Recovery Ahead

Gold Could Rebound If Real Interest Rate Pressure Eases, Says Jefferies

Gold prices may be poised for a recovery if pressure from rising real interest rates begins to ease, according to a new analysis from Jefferies. After several months of losses, the precious metal is now trading near the $4,000 per ounce level, with interest rate expectations remaining the key driver of investor sentiment.

Jefferies noted that the historical relationship between gold prices and real interest rates has re-emerged, making monetary policy expectations a crucial factor for the precious metal. As real yields rise, the opportunity cost of holding non-yielding assets such as gold increases, often weighing on prices. However, history suggests that once real rate pressures begin to fade, gold and gold mining stocks tend to outperform over the following year.

The investment bank highlighted that the market has undergone a dramatic shift in interest rate expectations since the beginning of 2026. Earlier forecasts anticipated one or two Federal Reserve rate cuts, but markets are now pricing in one or two potential rate hikes. This reversal has contributed to an estimated 25% decline in gold prices from their record highs, while weaker central bank purchases during the first quarter of 2026 also reduced support for the metal.

Jefferies examined previous periods of sharply rising real interest rates, including the 2013 taper tantrum, the 2018 real-rate peak, and the 2022 Federal Reserve tightening cycle. During these episodes, gold prices fell by 22.9%, 5.0%, and 6.7%, respectively, while gold mining equities experienced even steeper declines of 35.3%, 17.0%, and 28.6%.

Although short-term performance was negative in each case, the following 12 months produced mixed results. Gold mining stocks showed little recovery after the 2013 sell-off, surged following the 2018 peak, and posted a moderate rebound after the 2022 tightening cycle. According to Jefferies, the determining factor was whether real interest rate pressure eased after reaching its peak.

Current market data show that the 10-year TIPS real yield stands near 2.41%, while the Cleveland Fed's 10-year real interest rate is around 2.08%, both significantly higher than levels seen at the start of 2026. Meanwhile, the 10-year breakeven inflation rate remains relatively stable at approximately 2.27%. Reflecting the challenging environment, the SPDR Gold Shares (GLD) ETF has declined about 13% over the past three months, while the VanEck Gold Miners ETF (GDX) has fallen roughly 17%.

Despite the recent weakness, Jefferies believes the market has already absorbed much of the impact from higher real interest rates. Unlike previous rate-driven sell-offs, gold now benefits from several structural tailwinds, including stronger central bank buying during the second quarter of 2026, persistent geopolitical tensions, growing fiscal concerns, continued de-dollarization efforts, and increased investor allocations to hard assets.

The firm also noted that interest rate markets remain heavily skewed toward tighter monetary policy, with implied rates rising into 2027 and markets assigning a relatively high probability of further Federal Reserve tightening. However, Jefferies cautioned that this outlook could shift rapidly if geopolitical tensions—particularly the conflict involving the United States and Iran—ease, potentially reducing inflation risks and changing the path of monetary policy.

While higher real interest rates continue to challenge the gold market in the near term, Jefferies argues that easing rate pressure could provide the catalyst for a meaningful recovery in both bullion and gold mining stocks over the coming year.

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