Gold prices edged lower on Friday and were heading for a weekly decline as concerns over escalating US-Iran tensions strengthened expectations that the Federal Reserve could maintain a hawkish monetary policy stance.
Spot gold fell 0.2% to US$4,113.02 per ounce by 0735 GMT and was on track for a 1.5% weekly decline, while US gold futures for August delivery slipped 0.4% to US$4,121.90.
The latest US-Iran tensions, including attacks on US military infrastructure in Gulf states, have pushed oil prices higher and raised concerns over renewed inflation pressures. This has increased market expectations that the Federal Reserve may raise interest rates this year, reducing the appeal of gold as a non-yielding asset.
According to CME’s FedWatch tool, markets are pricing in a 63% chance of a September rate hike, up from around 54% a week earlier.
“Gold is in consolidation mode today following yesterday’s gains, with traders hesitant to commit to further upside amid the prevailing uncertainty over U.S.-Iran relations,” said Tim Waterer, chief market analyst at KCM Trade.
Meanwhile, RHB Investment Bank Bhd (RHB Research) maintained a negative trading bias on COMEX Gold, noting that the precious metal remains below key technical resistance levels despite recent buying interest.
RHB Research said COMEX Gold gained US$58.40 to close at US$4,140.80 on Thursday after trading between a low of US$4,063.40 and a high of US$4,148.40.
However, the research house noted that gold has yet to break above the downward-trending 20-day simple moving average (SMA), while the 50-day SMA continues to trend lower, adding further selling pressure.
“Consequently, we stick with the negative trading bias unless a bullish breakout happens from the US$4,400 resistance,” RHB Research said.
The research house maintained its short position recommendation initiated at US$4,605.70, with a stop-loss level at US$4,400.
It identified US$4,000 as the immediate support level, followed by US$3,700, while resistance levels are seen at US$4,400 and US$4,650.
Elsewhere, silver gained 0.2% to US$60.10 per ounce, platinum rose 1.2% to US$1,629.03 and palladium climbed 2.2% to US$1,274.34, although all three metals remained on track for weekly losses.
