Gold held near $4,400 an ounce on Wednesday as traders awaited the U.S. consumer price index for clues on the Federal Reserve's rate path, while uncertainty over reopening the Strait of Hormuz kept energy markets on edge. Silver and platinum also advanced, and China's central bank extended its gold-buying streak into a 21st straight month.
Gold extended its gains and held near a two-month high on Wednesday, with XAU/USD rising 0.7% to $4,400.02 an ounce as investors awaited fresh U.S. inflation data for clues on the Fed's next move. Gold Futures gained 0.4% to $4,459.30. XAG/USD advanced 1.8% to $65.88 an ounce, and XPT/USD rose 0.7% to $1,755.16.
Hormuz uncertainty keeps energy markets on edge
Bullion stayed supported as investors reassessed the odds of a deal to reopen the Strait of Hormuz. Pakistan's defense minister said Washington and Tehran were close to an arrangement, while reports of advanced Oman-Iran talks suggested diplomacy was still moving forward. Iran, however, has insisted the waterway will stay closed until the U.S. lifts its blockade on Iranian ports and compensates for damage from American military strikes.
The mixed signals have kept energy markets volatile: the U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping in the Strait of Hormuz and Bab el-Mandeb, and a U.S. Navy helicopter fired missiles at a Panama-flagged cargo vessel attempting to transit the Gulf of Oman. A drone attack also hit a refinery in Libya. Higher energy prices could push the Fed to keep interest rates elevated for longer, raising the opportunity cost of holding non-yielding bullion.
CPI and Chinese demand set the next test
Investors now await Wednesday's U.S. consumer price index, followed by producer prices on Thursday. A softer reading could ease pressure on the Fed to tighten, while a hotter number could revive rate-hike expectations; swaps currently put the odds of a quarter-point September hike around 50-50.
Meanwhile, the People's Bank of China raised its gold reserves for a 21st consecutive month in July, adding about 640,000 troy ounces to reach 76.08 million ounces, and gold-backed Chinese ETFs have continued to attract buyers. Tony Sycamore, senior market analyst at IG, said gold's retreat from $4,435 reflected profit-taking ahead of the CPI report, hawkish Fed commentary and renewed strength in energy prices. He added that bullion faces downtrend resistance around $4,460, drawn from the late-January record high near $5,602, with the 200-day moving average around $4,495 reinforcing that ceiling. A sustained break above both levels, he said, would open the way for a stronger recovery toward $5,000.
Source: Commodities & Futures News
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