Gold holds above $4,000 as Hormuz diplomacy cools crude ahead of Fed decision - Kitco PM Report

Gold is holding above $4,000 per ounce as diplomatic progress over the Strait of Hormuz eases crude oil prices ahead of the upcoming Federal Reserve policy decision, according to Kitco's afternoon market report. The transmission runs through inflation expectations and rate pricing: lower crude reduces the near-term inflation impulse, which tempers expectations for a hawkish Fed stance and weighs on real yields, supporting non-yielding bullion. The dollar is the other side of this channel, since a less hawkish rate path tends to pressure USD against major currencies, while easing Hormuz risk also reduces the geopolitical bid that had been pushing safe-haven flows into gold. Gold and USD are the most directly exposed, with gold sensitive to moves in real yields and the dollar index reacting to shifts in relative policy expectations. The key catalyst for traders is the Fed's rate decision and the accompanying press conference, where any signal on the inflation outlook and energy-price pass-through will determine whether the current easing in crude translates into a durable repricing of real yields.

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