Precious-Gold gains as oil pulls back, investors monitor MidEast developments
GLD•Gold rises as oil retreats
July 24 (Reuters) - Gold ticked higher on Friday, reversing earlier losses as oil retreated below the $100 per barrel mark, with investors monitoring developments in the Middle East for fresh cues on energy-driven inflationary risks and the outlook for U.S. interest rates.
Spot gold XAU= rose 0.2% to $4,055.38 per ounce by 0925 GMT, after dropping 2% on Thursday to $4,047.26, while U.S. gold futures for August delivery GCcv1 gained 0.2% to $4,058.10.
"Gold has shifted from earlier in negative territory to slightly positive, driven by lower oil prices, reducing pressure on the Fed to adjust its rates," said UBS analyst Giovanni Staunovo.
"Our view remains that the Fed will be on hold next week and that should be price supportive of gold over the coming months," he added.
Fed meeting, rates and other metals
Brent crude LCOc1 rose more than 7% on Thursday, breaking through $100 a barrel for the first time since May after U.S. President Donald Trump promised "major military punishment" for Iran and its Houthi allies, after Yemeni fighters struck two Saudi oil tankers in the Red Sea.
However, prices retreated below that milestone on Friday. O/R
Elevated oil prices due to Gulf supply disruptions have been weighing on gold prices as they raise expectations of higher-for-longer interest rates, which tend to diminish the appeal of non-yielding gold.
Investors are now eyeing the U.S. Federal Reserve's policy meeting next week, when it is largely expected to keep rates unchanged.
Still, traders are pricing in about a 78% chance of a rate-hike in September, according to the CME FedWatch Tool.FEDWATCH
The European Central Bank kept interest rates unchanged as expected on Thursday but held the door open to another increase in September.
