Gold edges up as Brent eases, Mideast developments in focus ahead of Fed meet

AI Summary

Gold prices edged up as Brent crude oil prices retreated from above $100 a barrel amid Middle East conflict developments. Investors awaited the upcoming U.S. Federal Reserve meeting decision influencing inflation and interest rates.

Gold edged up on Friday as Brent crude retreated from above $100 a barrel, while investors assessed developments in the Middle East conflict and their implications for inflation ahead of the U.S. interest rate decision next week. Spot gold was up 0.1% at $4,052.78 per ounce by 4:10 p.m. EDT (2010 GMT), after falling about 2% in the previous ‌session. Prices were ⁠up ⁠0.9% for the week so far, supported by dip-buying earlier in the week. U.S. gold futures for August delivery settled 0.5% higher at $4,070.80. "Gold and silver are carving out a base around $3,950 and $55, respectively, despite relentlessly higher yields. While a stop-loss move below can't be ruled out on a sharp war escalation, gold feels ready to move back higher ... A Fed clearly on hold next week would ⁠help," said ‌Tai Wong, an independent metals trader. Brent crude oil prices fell over 4%, after rising over 7% to settle above $100 in the previous ⁠session for the first time since May, after Iran-aligned Houthis said they struck two Saudi oil tankers in the Red Sea. [O/R] Bullion has fallen about 23% since the U.S.-backed war with Iran began in late February, pressured by expectations that war-driven inflation could keep interest rates higher for longer. While gold is seen as a hedge against inflation, higher rates typically weigh on the non-yielding metal. Investors now await the U.S. Federal Reserve's ‌policy meeting outcome next week, when it is largely expected to keep rates unchanged. Traders are pricing in about an 82% chance of a U.S. rate hike in September, ⁠according to the CME FedWatch Tool. [FEDWATCH] "Recent strength in bullion appears driven largely by dip-buying and short covering. This follows the sharp correction from record highs earlier this year ... Elevated oil prices and rising yields are likely to cap any recovery, leaving $4,000 as the key near-term level to watch," analysts at ING said in a note. Among other metals, spot silver rose 0.8% to $58.11 per ounce, platinum fell 0.8% to $1,587.17, and palladium fell 1.4% to $1,239.20.