Gold Futures Battle Between Fed Rate Risk and Middle East Tensions

Gold futures have staged a strong recovery after breaking down toward the 4000 area in late June, reclaiming the 4385 support zone as the Strait of Hormuz remains effectively closed and global central banks continue record buying. Sentiment is currently anchored to the Federal Reserve's next move, and while the odds of a September rate hike have not disappeared, this week's in line CPI and cooler than expected PPI prints have pushed those odds lower, even as the underlying inflation risk still traces back to the ongoing Iran war and its effect on energy prices. The coming weeks should hinge on whether buyers can defend the 4385 and 4200 levels, with the yearly VWAP near 4600 standing out as the next major test.Gold bullion stacked by Steve Bidmead via Pixabay