Geopolitical tensions push up oil prices, gold retreats slightly from two-week high, market focuses on next week's Federal Reserve meeting

1. In early Asian trading on Thursday, international gold prices were fluctuating just below a two-week high. The ongoing escalation of Middle East conflicts continues to push oil prices higher, putting pressure on gold prices, while traders are shifting their focus to next week's Federal Reserve policy meeting for clues about potential rate hike timing. 2. Spot gold is currently trading near $4,115 per ounce, down about 0.3%. In the previous trading day, it touched $4,165,927, a new high since July 7. 3. Oil prices rose more than 1.5% on the day, reaching the highest level in over six weeks. The United States launched a new round of air strikes on Iran, while Yemen's Houthi forces attacked oil tankers in the Red Sea, further escalating geopolitical risks. 4. The escalating US-Iran tensions supported market demand for the safe-haven US dollar. The yield on the interest rate-sensitive two-year US Treasury bond climbed to a 17-month high, as the rise in oil prices sparked market concerns that potential disruptions in energy supply could reignite inflation, thereby increasing the likelihood of a Federal Reserve rate hike. 5. The Federal Reserve will meet next week, and the market generally expects rates to remain unchanged, but the futures market has already priced in at least one rate hike before the end of the year. The European Central Bank will almost certainly keep rates unchanged on Thursday, but may leave open the possibility of another hike in September.