Gold fell on Thursday after hitting a two-month high of $4,369, erasing most of the previous session’s gain of 0.9%. The yellow metal is currently trading near the daily pivot point of $4,365. If it holds above this level, it could rise toward resistance levels at $4,440 then $4,490. On the downside, if the price falls below the aforesaid pivot point, it may decline to support levels near $4,315 then $4,262.
Global markets are navigating a delicate balance between geopolitical tensions and shifting expectations for U.S. monetary policy. Uncertainty over the stalled U.S.-Iran peace deal continues to keep investors focused on the Middle East, with the lack of progress raising concerns over the Strait of Hormuz and supporting oil prices. At the same time, crude prices have pulled back slightly as weaker global demand and a sharp rise in U.S. inventories offset supply concerns. Meanwhile, the U.S. dollar remains under pressure as softer-than-expected inflation has reduced expectations for a Federal Reserve rate hike in September, adding to volatility across currency and commodity markets.
Market Watch
Iran: No Progress Made on Reviving Interim Peace Deal with US
An Iranian senior official said on Thursday that no progress has been made in talks aimed at reviving the interim peace deal with the United States, amid continued disagreements between the two sides over the implementation of the agreement and efforts to end the conflict in the Gulf.
The Iranian official said that one of the issues being discussed through intermediaries is the possibility of Washington returning to the interim agreement, as well as establishing a timetable for implementing its commitments. However, the official stressed that “no progress has been made at all” on the matter.
The agreement reached in June called for an immediate and permanent cessation of military operations on all fronts, but the understanding quickly came under strain after U.S. President Donald Trump said on July 7 that the agreement had ended. Iran subsequently described the deal as “suspended.”
One of the main points of disagreement concerns the Strait of Hormuz. The United States has accused Iran of failing to meet its commitments regarding the reopening of the vital shipping route. Tehran, meanwhile, says Washington has failed to honor its obligations, including lifting the blockade imposed on Iranian ports and releasing frozen Iranian assets.
The Iranian official also rejected discussions about extending the 60-day period set by the interim agreement for reaching a final deal, arguing that the period had not effectively begun because of what Tehran described as a U.S. violation of the agreement shortly after it was reached.
The developments come as the Strait of Hormuz remains closed to shipping, according to Iranian authorities, while Trump has said that the United States has full control over the strategic waterway.
Oil Prices Trim Previous Session’s Gains
Oil prices edged lower on Thursday, trimming some of the gains recorded in the previous session, as investors focused on signs of weaker global demand for crude, while geopolitical risks in the Middle East and uncertainty surrounding the Strait of Hormuz continued to provide some support to prices.
Brent crude futures fell by around 11 cents, or 0.1%, to $88.87 a barrel, while U.S. West Texas Intermediate (WTI) crude futures declined by around 16 cents, or 0.2%, to $83.11 a barrel in early trading, after both benchmarks ended the previous session slightly higher.
The decline came amid growing concerns over global oil demand, particularly after data showed that U.S. crude inventories posted their largest weekly increase since January 2023. U.S. crude stocks rose by around 17.4 million barrels last week, largely due to lower crude exports, while analysts had expected inventories to decline.
Downward pressure on prices also increased after both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) lowered their forecasts for global oil demand growth in 2026. According to Reuters, OPEC expects demand to grow by around 580,000 barrels per day, while the IEA forecasts a decline in global oil demand of around 1.6 million barrels per day this year.
Meanwhile, geopolitical developments in the Middle East continue to support oil prices, with uncertainty surrounding negotiations between the United States and Iran and the lack of an agreement to reopen the Strait of Hormuz, one of the world’s most important routes for oil transportation.
Oil prices had posted strong gains in previous sessions, with Brent crude rising more than 5% on Monday before extending its advance on Tuesday and Wednesday, supported by concerns over continued supply disruptions in the region.
Investors are now closely watching the balance between geopolitical risks and potential supply disruptions on one side, and global demand expectations and U.S. oil inventories on the other, while markets await further economic data from the United States to assess the outlook for economic growth and monetary policy.
Dollar Index Under Bearish Pressure
The U.S. Dollar Index hovered near the 100 level on Thursday, remaining under pressure after U.S. inflation data came in line with expectations and reinforced market expectations that the Federal Reserve is unlikely to raise interest rates at its upcoming meeting.
The Dollar Index, which measures the performance of the U.S. currency against a basket of six major currencies, stood at around 99.98, little changed from the previous session. Despite Thursday’s stability, the index remains up around 0.4% for the week.
U.S. inflation data released on Wednesday showed that consumer prices increased by 0.1% in July, in line with market expectations. The data prompted traders to scale back expectations for a potential U.S. rate hike in September.
According to market pricing, the probability of a Federal Reserve rate hike in September fell to around 40%, from 54% before the inflation data, reducing the dollar’s appeal against major currencies.
In the foreign exchange market, the euro traded near $1.1525, while the dollar stood at around 159.35 yen, as markets continued to monitor the Japanese currency and the possibility of intervention by Japanese authorities if the dollar approaches the 160-yen level.
The dollar’s weakness comes despite several factors supporting the U.S. currency, including geopolitical risks in the Middle East and higher oil prices, amid continued uncertainty surrounding negotiations between the United States and Iran and the prospects for reopening the Strait of Hormuz.
Investors are now awaiting a series of U.S. economic indicators for further clues on inflation, economic growth and the labor market, which could help determine the Federal Reserve’s monetary policy outlook at its upcoming meeting.
Overall, the dollar’s direction remains closely linked to changes in U.S. interest-rate expectations. A decline in expectations for tighter monetary policy reduces the expected returns on dollar-denominated assets and could place further downward pressure on the currency in the coming period.
Looking Ahead
Markets are awaiting the release of U.S. Producer Price Index (PPI) and initial jobless claims data later Thursday, with both indicators expected to provide further clues about inflationary pressures and the health of the labor market. Investors will closely assess the figures for their potential impact on expectations for the Federal Reserve’s interest-rate path, particularly after Wednesday’s CPI data reduced expectations for a September rate hike.