XAU/USD falls 0.85% amid geopolitical uncertainty and rising oil prices, dimming Fed rate cut prospects for 2024.
Gold prices declined 0.85% to near $4,530 in European trading Tuesday, pressured by escalating Middle East tensions and a rebound in oil prices. The drop follows reports of intercepted drones and explosions in Iran, though safe-haven demand remains subdued due to inflation concerns tied to rising energy costs.
Spot gold remains below its 20-day Exponential Moving Average at $4,601.20, signaling a bearish near-term bias. The Relative Strength Index hovers between 40.00 and 60.00, reflecting investor indecision. Markets now price a 43.5% chance of the Federal Reserve holding rates steady this year, with some bets shifting toward a potential hike.
The oil price recovery, driven by Middle East risks, has stoked inflation fears, reducing expectations for Fed easing and dampening gold’s appeal as a non-yielding asset.