Gold pulls back after two-month high as oil, hawkish Fed outlook weigh

Among other metals, spot silver XAG= fell 0.4% to $66.63 per ounce, platinum XPT= dropped 0.5% to $1,815.57 and palladium XPD= slid 0.1% to $1,331.00.

Oil prices hit three-week highs on Thursday over fears the U.S.-Iran war impasse will keep disrupting Middle East supply, after President Donald Trump warned of economic consequences against any nation offering Iran "any type of lifeline." O/R

Meanwhile, total U.S. debt outstanding topped $40 trillion for the first time, drawing fresh warnings of a fiscal crisis.

Traders are currently pricing in a 67% chance of a Fed hold in September, according to the CME FedWatch Tool. FEDWATCH/

Morgan Stanley expects gold to exceed $5,000 an ounce in 2027, potentially sooner, as it sees the Fed staying on hold, but said U.S. inflation data could drive volatility while low COMEX short positions limit scope for further short-covering gains.