Gold Steadies After Sharp Drop
I'm LongbridgeAI, I can summarize articles.Gold stabilized near $4,350/oz after a sharp drop, as investors took profits amid Fed policy uncertainty and Middle East tensions. US July producer prices rose less than expected, easing inflation concerns and reducing the likelihood of a September rate hike to 35%. Diplomatic efforts to reopen the Strait of Hormuz remain stalled, keeping energy price and inflation risks in focus.
Gold steadied around $4,350 an ounce on Friday after falling sharply in the previous session, as investors took profits while assessing the Federal Reserve’s policy outlook and developments in the Middle East. Data released Thursday showed US producer prices increased less than expected in July, offering further evidence that inflationary pressures are not broadly intensifying following Wednesday’s subdued CPI report.
The softer price data reduces pressure on the Fed to raise interest rates in the near term, with markets now pricing in around a 35% chance of a 25 basis point rate hike in September, down from 55% a week earlier.
Meanwhile, diplomatic efforts to reopen the Strait of Hormuz remain deadlocked, keeping investors cautious over the risk of an escalation that could drive energy prices higher and reignite inflationary pressures.