Key Takeaways:
Gold climbed past $4,100 an ounce to a two-week high as a softer dollar and fading Federal Reserve rate-hike bets drew buyers into the metal.
Gold climbed past $4,100 an ounce to a two-week high during the Asian session Wednesday, as a softer dollar and fading Federal Reserve rate-hike bets drew buyers.
US Treasury Secretary Scott Bessent said the US could reach a deal with Iran to reopen the Strait of Hormuz by Wednesday, while Axios reported Washington, Tehran and Oman are closing in on an interim agreement to reopen the strategic waterway.
The OPEC+ decision on Sunday to increase production from September eased supply concerns and dragged crude oil to a fresh low since June 13, tempering inflation expectations and hawkish Fed bets. US job openings edged lower to 7.36 million in June, though Kansas City Fed President Jeff Schmid and Philadelphia Fed President Anna Paulson both backed tighter policy to fight inflation.
Gold last traded above $4,130 in late July. The ADP private-payrolls report and ISM Services PMI due Wednesday, followed by Friday's nonfarm payrolls, are the next signals for the metal's direction.
Breakout Above 200-Period EMA Opens $4,130 Test
From a technical standpoint, an intraday breakout through the 200-period exponential moving average on the 4-hour chart validates the positive outlook. The relative strength index sits near 65, suggesting firm bullish momentum, while the moving average convergence divergence histogram remains positive, indicating buyers retain control in the short term.
The up-move could struggle above $4,130, with overbought signals on momentum gauges likely to cap gains if buying enthusiasm fades. On the downside, immediate support sits at the 200-period EMA near $4,115, where a break would expose a deeper correction toward the daily low near $4,065, en route to the $4,043-$4,042 region, the $4,020 level and the $4,000 psychological mark.
Silver also strengthened, revisiting its monthly high near $61 an ounce as crude prices plunged further, according to FXStreet data. The dollar was weakest against the New Zealand dollar, down 0.31 percent, while edging lower against the euro, pound and yen, according to the session's heat map.
Traders still price in a greater chance the US central bank will raise borrowing costs by year-end as signs the labor market is finding its footing, which may hold back dollar bears from aggressive bets. The JOLTS reading of 7.36 million openings remained above levels seen last year, supporting the case for tighter monetary policy even as inflation concerns ease.
Fresh developments surrounding the Middle East crisis should provide further impetus to the dollar and gold price. The prospect of a diplomatic resolution to the five-month-old US-Iran war has reduced demand for the safe-haven dollar, with the fundamental backdrop tilted in favor of XAU/USD bulls and supporting prospects for further intraday appreciation.
This article is for informational purposes only and does not constitute investment advice.
