Gold stabilized on Friday, looking to erase some of the losses recorded in the previous session. The yellow metal is currently trading near the bullish trend line, a sustained move above it could regain the daily pivot point near $5122, then the resistance levels at $5185 then $5228. Conversely, if the price falls below the aforesaid trend line, it may test the support levels of $5027 then $4981.
Gold prices were on track for a second consecutive weekly drop, as surging energy prices dimmed prospects for near-term U.S. interest rate cuts.
Market Watch
Mojtaba Khamenei: Strait of Hormuz still closed
Iran will continue blocking the Strait of Hormuz, the world’s busiest oil shipping channel, according to a statement attributed to Iran’s new Supreme Leader Mojtaba Khamenei.
His message was broadcast on Iranian state TV, but Khamenei did not appear in person. His message was instead read out by a newsreader.
The U.S. permitted the sale of some Russian petroleum products that had been sanctioned due to Moscow’s hostilities in Ukraine.
Markets bet on steady US interest rates
Traders, however, expect the Fed to keep rates steady in the current 3.5%-3.75% range at the end of its two-day meeting on March 18, according to CME Group’s FedWatch tool.
While recent inflation data suggest price growth is under control, the war and the resulting spike in crude prices have yet to filter through the data.
Dollar hits three-month high
The U.S. dollar rose to a more than three-month high on Friday and was set for its second weekly gain since the beginning of the war in Iran as turmoil in markets left it the last safe-haven standing.
In the same vein, the number of Americans filing new applications for unemployment benefits fell last week, suggesting labor market conditions remained stable even after the economy shed jobs in February, but the U.S.-Israeli war against Iran poses a downside risk.
Looking Ahead
Markets are closely watching for important U.S. news at 12:30 GMT, most notably the core personal consumption expenditure price index, which is expected to rise 3.1% year-on-year in January.