Gold slipped on Thursday, after posting significant gains in the previous session, trading near the key $4,500. The yellow metal is currently moving within a bullish channel on the four-hour timeframe, where it is poised to resume its upward trend, targeting resistance levels at $4,518 then $4,555. On the downside, if the price falls below the channel’s middle line, it may test support levels at $4,420 then $4,379.
Global markets are closely monitoring developments across the United States and the Middle East, as the U.S. national debt surpasses the $40 trillion mark, raising concerns over the country’s fiscal outlook and borrowing costs. At the same time, oil prices are rising amid growing concerns over Middle Eastern supply disruptions, keeping geopolitical risks at the forefront of investor sentiment. Meanwhile, the U.S. dollar is hovering near a three-month low, pressured by easing Treasury yields and uncertainty over the Federal Reserve’s monetary policy outlook. Together, these developments are shaping expectations across financial markets and influencing investor demand for major asset classes.
Market Watch
U.S. National Debt Surpasses the $40 Trillion Mark
The U.S. national debt has surpassed the $40 trillion mark for the first time in the country’s history, highlighting the continued fiscal pressures facing the federal government and the widening budget deficit.
According to the latest data from the U.S. Treasury Department, total outstanding public debt reached approximately $40.047 trillion as of August 18, exceeding the historic $40 trillion threshold. This figure includes around $32.3 trillion in debt held by the public, in addition to approximately $7.8 trillion in intragovernmental holdings.
This milestone comes only around five months after U.S. debt surpassed $39 trillion, underscoring the accelerating pace of government borrowing. The national debt has also more than doubled compared with its level in 2017, driven by pandemic-related spending, persistent federal budget deficits, and rising costs associated with programs such as Social Security and healthcare.
U.S. Treasury data also indicate that interest costs on the national debt have become one of the largest sources of pressure on the federal budget, with interest expenses continuing to rise as borrowing costs remain significantly higher than in previous years.
The U.S. Treasury provides daily data through its Debt to the Penny dataset, which tracks the total outstanding public debt. Meanwhile, investors and financial markets continue to closely monitor developments in the federal deficit and government borrowing, particularly given their potential impact on U.S. Treasury yields and the country’s broader fiscal outlook.
Oil Prices Rise Amid Concerns Over Middle East Supply Disruptions
Oil prices rose during Thursday’s trading session, supported by growing concerns over potential disruptions to crude supplies from the Middle East amid the ongoing tensions between the United States and Iran and uncertainty surrounding shipping through the Strait of Hormuz.
Brent crude and West Texas Intermediate (WTI) futures extended their gains for a fifth consecutive session. Brent October futures rose to around $91.87 per barrel in early trading, while U.S. WTI climbed to approximately $86 per barrel, as markets continued to assess the risk that prolonged regional tensions could disrupt oil flows from the Middle East.
Market attention remains focused on the Strait of Hormuz, one of the world’s most important energy shipping routes. Oil tanker traffic through the strait has remained significantly below normal levels, while uncertainty over the prospects of a diplomatic agreement or a resumption of negotiations has heightened concerns about prolonged supply disruptions.
At the same time, regional tensions intensified after the UAE suspended economic and financial transactions with Iran, adding further pressure to efforts to reach a swift diplomatic resolution and keeping a geopolitical risk premium embedded in oil prices.
Despite pressure from rising U.S. crude inventories, concerns over Middle Eastern supplies remain a key driver of oil prices. The U.S. Energy Information Administration expects oil flows through the Strait of Hormuz to remain severely restricted during August, which could continue to support crude prices until supply flows return to more normal levels.
Dollar Hovers Near Three-Month Low
The U.S. dollar remained near its lowest level in three months during Thursday’s trading session, pressured by declining U.S. Treasury yields after the Treasury Department announced an increase in long-term bond buybacks, in a move aimed at easing disruptions in the bond market.
The U.S. Dollar Index, which measures the performance of the greenback against a basket of six major currencies, fell to around 98.72 points, its lowest level in three months, before paring some of its losses. The move followed a sharp decline in the U.S. currency during the previous session after the Treasury announced plans to double its buyback operations for longer-dated bonds.
The U.S. Treasury’s measures helped ease selling pressure in the bond market after the yield on 30-year U.S. Treasuries surged to 5.337%, its highest level since 2007, before retreating to around 5.20%. The decline in Treasury yields reduced the attractiveness of the dollar relative to major currencies.
In currency markets, the euro rose to around $1.1692, reaching its highest level in three months, while the British pound climbed to approximately $1.3631. The Japanese yen also recovered from its recent lows, supported by expectations that Japanese authorities could intervene in the foreign exchange market.
Investors are also awaiting signals on monetary policy from the Federal Reserve, after the minutes of its July meeting showed growing concerns among some officials about inflation, with some policymakers prepared to consider raising interest rates if inflation remains above the central bank’s 2% target. At the same time, weaker inflation, labor-market, and economic activity data have reduced expectations of an immediate rate hike.