Gold prices held firm during Friday’s trading (July 31) after the US dollar weakened sharply following Japanese intervention to prop up the yen. A weaker dollar made gold cheaper for buyers using other currencies, thereby sustaining demand for the precious metal.
Gold traded near multi-day highs and appeared poised to record its first monthly gain since February. Beyond the dollar’s influence, gold prices were also supported by the Federal Reserve’s decision to keep interest rates unchanged at this week’s meeting.
The US central bank opted to hold rates steady despite persistent inflationary pressures stemming from the conflict in the Middle East and rising energy costs. This decision provided room for gold to rally, as the market had previously anticipated a potential rate hike.
However, the Fed’s voting results revealed that some officials still favored a tighter policy stance. Fed official Kevin Warsh also emphasized that interest rate hikes remain an option if inflation continues to stay above the central bank’s target.
From Japan, the yen strengthened after authorities reportedly re-entered the foreign exchange market. US Treasury Secretary Scott Bessent even assessed that the yen remains undervalued, noting that excessive currency volatility could disrupt market stability.
Meanwhile, the conflict between the United States and Iran remains a focus for investors. Geopolitical tensions could drive demand for safe-haven assets, though a surge in energy prices also risks keeping inflation elevated. Under these conditions, the direction of gold prices will continue to be heavily influenced by dollar movements, Fed policy, and developments in the Middle East conflict. (asd)*
Source: Newsmaker.id