held above $4,300 during Tuesday’s European session, while remained around $4,357.
Expectations for a December Fed rate hike have risen to 89%, according to the CME FedWatch Tool, as Fed policymakers remain concerned that U.S. inflation is still too high. St. Louis Fed President Alberto Musalem said that further rate hikes may be needed to bring inflation back to the Fed’s target.
However, U.S. Treasury yields pulled back, with the retreating from its highest level since 2007. The decline in yields could help ease bearish pressure on gold prices.
Iran offered to reopen the Strait of Hormuz within seven days if the U.S. eases its military blockade, according to the latest reports. Oil prices reacted immediately, with falling below $90 per barrel. That’s why gold prices rebounded above $4,300 after hitting an intraday low of $4,291 early in the European session.
Markets are now awaiting Trump’s meeting with Gulf Cooperation Council leaders later today. Any positive deal that could facilitate the reopening of the Strait of Hormuz could ease long-term inflation expectations, potentially providing further support for gold prices.
The Trump–Xi meeting is also a key event for investors to watch this week.
From a technical perspective, $4,400 is the key psychological resistance level for gold. Any further upside momentum would require a break above this level.
$4,280 is the nearest support level. If gold breaks below this level, the price could fall toward $4,250 in the short term.
