The price of gold has hardly changed, as the growth of the US currency has been offset by the ongoing geopolitical tensions in the Middle East.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.14% to 105.56.
The prospects for the Fed's monetary policy also remained in the focus of investors' attention. Yesterday, Minneapolis Fed President Kashkari said that stalled inflation buoyed in part by housing market strength means the Fed may need to hold rates steady all year. Last week, Fed Chair Powell said the wait to loosen policy is taking longer than anticipated, but signaled his inclination is still to cut. For now, the markets see marginally higher chances for two cuts in the U.S. this year, with the first fully baked in for November. According to the CME FedWatch Tool, markets see a 64.8% probability of a rate cut in September, and a 77.2% probability of monetary policy easing in September.
In the Middle East, Israel’s military edged into the Gazan city of Rafah, with a truce between the Jewish state and Hamas still remaining elusive. Israel has not seen a breakthrough in the Cairo talks so far, but according to an Israeli official, it will continue to keep a team of its negotiators there.