On Friday afternoon, gold hit a fresh four-week high when it traded at $4,886, having started the week below $4,650. But it has pulled back since then and has spent most of the European session so far below the key $4,800 level.
Source: TN Trader
According to the CME’s FedWatch Tool, the probability of a 25-basis point rate cut before year-end is around 32%, having dropped from 37% at the end of last week. Investors were pricing in the fact that the Strait of Hormuz remains closed to shipping, and that there were skirmishes between the US and Iran in the region over the weekend, despite the ongoing ceasefire.
As mentioned before, neither gold nor silver are acting as safe havens. Quite the opposite, as this role now belongs to the US dollar, for now. And when dollar buyers come in on a ‘flight to safety’, that puts downside pressure on precious metals.
