Gold held above $4,100 in Asian trade on Thursday after easing from an over two-week high, with gains restrained by rising US Treasury yields. Crude oil climbed to its highest level since 11 June as the US and Iran exchanged strikes for a 12th consecutive night, while Yemen\u2019s Iran-aligned Houthis declared a blockade on a Red Sea route that handles about 7% of global oil supply. Together with reduced shipping through the Strait of Hormuz, this has fed inflation concerns and lifted expectations for tighter Federal Reserve policy. CME FedWatch shows markets pricing over a 90% chance of a Fed rate rise by year-end, keeping the 10-year yield near a two-month high, although a softer US Dollar offered some support to bullion.<\/p>\n
Technically, XAU\/USD paused near $4,155\u2013$4,165, where the 200-period Exponential Moving Average on the four-hour chart aligns with the 23.6% Fibonacci retracement of the April\u2013June move. Momentum gauges remain constructive, with RSI near 63 and MACD still positive, but a break is needed to extend the move towards $4,164.97 and then $4,303.59. Support is seen at $3,940.90. Attention turns to US Weekly Initial Jobless Claims and an ECB meeting for near-term volatility.<\/p>\n
With gold consolidating just above $4,100, we recommend derivative traders wait for a confirmed breakout before taking large directional positions. The crucial level to watch is the $4,155 to $4,165 resistance range, which currently caps further upward movement. If gold breaks above this barrier, we should look to buy short-term call options targeting the next major resistance at $4,303.<\/p>\n
Given that markets are pricing in a 90% chance of a Federal Reserve rate hike by the end of the year, US Treasury yields will likely remain elevated. Historically, high yields create a tough environment for non-yielding assets like gold, which explains why the metal’s gains are currently capped. To profit from this trend, we suggest trading interest rate futures or shorting Treasury bond derivatives as the 10-year yield tests multi-month highs.<\/p>\n
The escalating conflict in the Middle East has blocked vital shipping lanes, threatening nearly 7% of the world’s daily oil supply. This disruption has pushed crude futures higher, stoking fresh inflation fears that will force central banks to stay hawkish. We advise using crude oil call options to hedge against sudden supply shocks while keeping an eye on the highly volatile energy derivatives market.<\/p>\n
Technical indicators like the Relative Strength Index at 63 suggest that buyers still hold some power, but momentum is stalling. If gold fails to break the current resistance and reverses, we must prepare for a pullback toward the solid floor at $3,940. Under this scenario, we should utilize put options to protect existing portfolios or capture gains from a short-term correction.<\/p>\n\n\n\n