Precious Metals Diverge Amid Geopolitical Tensions
Gold prices remained subdued for a second day, trading near the $4,020 level amid uncertainty surrounding the Federal Reserve and elevated Middle East tensions. Regional risk increased following reports of US military strikes in Iraq targeting Iran-backed groups, which also contributed to a rebound in crude oil prices. In contrast to gold, silver prices registered gains during the Asian trading session.
Markets Await Federal Reserve Policy Decision
The US Dollar Index traded in a narrow range as market participants adopted a cautious stance ahead of the Federal Open Market Committee's (FOMC) policy announcement. This sentiment was reflected across major currency pairs, with the Euro and Canadian Dollar consolidating against the greenback. Traders are awaiting the central bank's statement for fresh directional cues on US monetary policy.
Softer Australian Inflation Weighs on Currency
The Australian Dollar weakened after domestic core inflation data for the second quarter came in below forecasts. The softer-than-expected consumer price index has tempered expectations for further interest rate hikes by the Reserve Bank of Australia. This shift in monetary policy outlook prompted selling pressure on the Australian currency against its peers.
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