Gold price (XAU/USD) rebounds to around $4,120 during the early Asian session on Friday. The precious metal edges higher as traders weigh a resumption of war in the Middle East.
The White House signaled that it is still committed to the memorandum of understanding with Iran, even though US President Donald Trump’s declared earlier this week that the framework deal to end the Iran war was “over” after Tehran carried out strikes against vessels in the Strait of Hormuz and against neighboring countries.
However, uncertainty remains high as Trump said that strikes would “get much worse” if Tehran again attacked ships in the strait. On Thursday, the Islamic Republic targeted US bases in Bahrain, Kuwait and Qatar. Jordan intercepted eight Iran-launched missiles, according to Axios.
Escalating tensions between the US and Iran could drive crude oil prices higher, stoking inflation fears and forcing the Federal Reserve (Fed) to maintain its higher-for-longer rate stance.
The release of minutes from the Fed’s June meeting, which was Chairman Kevin Warsh’s first, reflected a divided central bank not sure how to proceed on rates without more information on inflation.
The minutes said that “many participants indicated that the appropriate level of the federal funds rate would be within or slightly below the current target range at the end of this year,” while also saying that “many other participants, however, assessed that the appropriate level of the federal funds rate would be above the current target range.”
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