Gold slips from two-week peak as oil advances; Fed meeting in focus
GLD•Other precious metals decline
Spot silver XAG= dropped 1.3% to $58.90 per ounce, platinum XPT= fell 1% to $1,628.63 and palladium XPD= lost 1.2% to $1,274.96.
Gold eases from two-week high as oil rises
July 23 (Reuters) - Gold fell on Thursday from a two-week high hit the previous day, as an escalating Middle East conflict drove oil prices higher, while traders awaited the Federal Reserve policy meeting next week for clues on the timing of potential interest rate hikes.
Spot gold XAU= slipped 0.6% to $4,103.39 per ounce by 0713 GMT, having climbed to its highest since July 7 at $4,165.87 on Wednesday. U.S. gold futures GCcv1 for August delivery fell 1.1% to $4,106.40.
"Oil continues to be up, adding to pressures of inflation and expectations of Fed rate hikes, capping a positive undertone in gold as the dollar weakens," said Jigar Trivedi, a senior research analyst at IndusInd Securities.
Oil, yields and rate expectations weigh on bullion
Oil prices rose to their highest in more than six weeks, with the United States launching a new round of strikes on Iran and Yemen's Houthis targeting oil tankers in the Red Sea. O/R
The dollar eased 0.1%, making greenback-priced bullion more affordable for holders of other currencies. USD/
Interest rate-sensitive two-year U.S. Treasury yields climbed to a 17-month high as rising oil prices stoked concerns that renewed energy disruptions could reignite inflation and raise the odds of Fed rate hikes. US/
The Fed is widely expected to keep interest rates unchanged next week, although futures markets are broadly positioned for at least one hike by year-end.
Traders are pricing in a 77% chance of a rate increase in September, according to the CME FedWatch Tool. FEDWATCH
