FX.co ★ Gold Rebounds as Oil Prices Ease

Gold rose back above $4,500 per ounce on Tuesday, rebounding from the previous session’s losses as a decline in oil prices helped ease inflation worries, even as US–Iran peace talks remained at an impasse. On Monday, Iranian media reported that Tehran had suspended communications with Washington in response to Israeli strikes in Lebanon. Still, President Donald Trump said negotiations were continuing and suggested a memorandum of understanding with Iran to reopen the Strait of Hormuz could be concluded as early as next week.

Despite the pullback in oil, markets are still pricing in a Federal Reserve rate hike before year-end after US inflation quickened, largely reflecting tensions stemming from the Middle East conflict. Investors are now looking ahead to Tuesday’s JOLTS job openings release and Friday’s closely watched US monthly employment report for further clues on the Fed’s policy trajectory.