By Joseph Dahrieh, Managing Director at Tickmill
Gold recovered on Wednesday, climbing back above USD 5,200 per ounce after two sessions of losses. Investors remained focused on the evolving geopolitical landscape, which continues to reinforce gold’s appeal. Tensions in Eastern Europe and the Middle East could continue to drive investors toward safe-haven assets.
However, the heightened risks surrounding the Strait of Hormuz have driven crude prices sharply higher. The latter fueled concerns about persistent inflation and affected the monetary policy outlook, pushing back the expected timing of interest rate cuts by the Federal Reserve. In this regard, Treasury yields moved higher across the curve, strengthening the US dollar and weighing on gold.
Investors now turn their attention to upcoming US data, including services activity and labour market indicators, which could further reshape expectations for Fed monetary policy and inject fresh volatility into gold markets. Stronger-than-expected figures could pressure gold prices, while softer data could drive the market up.