West Texas Intermediate crude oil held near $90 a barrel on Friday after pulling back earlier in the week.
Spot Brent crude oil stayed below $96.
The Israel-Lebanon ceasefire helped take some risk premium out but the Strait of Hormuz is still restricted and crude oil at these levels keeps the inflation argument alive.
That matters for Spot Gold (XAUUSD) because crude oil is the reason the Fed cannot cut even if the labor market were to weaken.
What to WatchThe 172,000 payrolls print reset the macro picture for Spot Gold (XAUUSD) going into next week.
West Texas Intermediate crude oil held near $90 a barrel on Friday after pulling back earlier in the week. Spot Brent crude oil stayed below $96. The Israel-Lebanon ceasefire helped take some risk premium out but the Strait of Hormuz is still restricted and crude oil at these levels keeps the inflation argument alive.
That matters for Spot Gold (XAUUSD) because crude oil is the reason the Fed cannot cut even if the labor market were to weaken. Cleveland Federal Reserve President Beth Hammack said this week that rate hikes are still possible and she pointed directly at energy costs. Strong jobs data plus elevated crude oil gives the committee no room to ease. Gold needs both to soften before the rate-cut trade comes back.
What to Watch
The 172,000 payrolls print reset the macro picture for Spot Gold (XAUUSD) going into next week. Rate hike odds at 98% and the 10-Year U.S. Treasury yield above 4.5% are sitting directly on top of the metal. The U.S. Dollar Index at its strongest level since April adds another layer.
Federal Reserve Chair Kevin Warsh’s first policy meeting is later this month. Friday’s data handed him a strong labor market with crude oil still elevated and inflation still above target. The rate-cut case that was supporting gold is not coming back unless the next round of economic data starts breaking down.
