Gold holds firm as traders assess Fed outlook and geopolitical tensions

Gold prices remained near a two-week high on Thursday as investors weighed safe-haven demand generated by escalating tensions in the Middle East against concerns that rising oil prices could keep inflation elevated and delay any easing of U.S. monetary policy.

Spot gold (XAU/USD) edged 0.1% lower to $4,127.99 an ounce, while Gold Futures slipped 0.5% to $4,130.62. Silver (XAG/USD) gained 0.3% to $59.88 an ounce and platinum (XPT/USD) advanced 0.8% to $1,658.28.

After climbing roughly 3% over the previous two sessions, bullion paused as investors evaluated the next major catalysts.

Oil prices reinforce inflation concerns

The conflict between the United States and Iran continued to dominate financial markets, with renewed attacks on commercial shipping in the Red Sea adding to concerns over global energy supplies.

The disruption has helped keep crude oil prices elevated, increasing expectations that inflation could remain above central bank targets for longer.

A prolonged period of higher inflation could encourage the Federal Reserve to maintain restrictive interest rates, a scenario that typically limits upside for non-yielding assets such as gold.

Focus turns to next week’s Federal Reserve meeting

Markets remain uncertain about the Fed’s next move, with investors closely watching next week’s policy meeting for updated guidance on interest rates.

Any indication that policymakers intend to keep borrowing costs elevated for an extended period could influence precious metal prices in the near term.

Investor demand remains resilient

Analysts at ANZ said investor appetite for gold has remained resilient despite expectations of tighter monetary policy.

The bank highlighted rising speculative long positions and stronger inflows into gold-backed exchange-traded funds, suggesting that many investors continue to use bullion as a hedge against market volatility and expensive equity valuations.

Gold has also remained comfortably above the key $4,000 level, with traders watching whether the metal can extend its recovery toward resistance around $4,200.