Safe-haven demand offsets pressure from higher yields
Gold prices remained firmly higher on Wednesday, holding above the $4,130-per-ounce mark as investors sought safe-haven assets amid worsening geopolitical tensions in the Middle East. The precious metal continued to advance despite a firmer U.S. dollar and rising Treasury yields, with markets also weighing the inflationary effects of elevated oil prices ahead of the Federal Reserve’s upcoming policy meeting.
At 02:08 ET (06:08 GMT), XAU/USD gained 1.3% to $4,132.79 an ounce, while Gold Futures climbed 1.5% to $4,137.09. XAG/USD rose 1.5% to $59.71 an ounce, while XPT/USD advanced 2.3% to $1,666.59.
Markets watch Fed meeting as oil prices stay elevated
The precious metal added to the previous session’s rally of nearly 2% as investors monitored mounting threats to global energy supplies, raising concerns that inflation could remain stubbornly high and influence the Federal Reserve’s policy path.
Attention is shifting toward next week’s Fed meeting, where policymakers are expected to keep interest rates unchanged. However, traders are looking for any indication that officials may continue signalling a prolonged period of restrictive monetary policy if energy-related inflationary pressures persist.
Meanwhile, U.S. President Donald Trump reiterated that Washington remained open to negotiations with Iran, even as U.S. military operations entered an 11th consecutive night and Tehran continued retaliatory strikes. Developments around critical shipping corridors, including the Strait of Hormuz and the Red Sea, also remained closely watched.
Oil prices continued to trade above $90 per barrel after extending their July advance, with persistent attacks in the Gulf region and renewed concerns over maritime security reinforcing fears of supply disruptions.
Analysts see improving technical conditions
Tony Sycamore, market analyst at IG, said gold’s rebound despite a stronger U.S. dollar and rising Treasury yields suggests investors are beginning to re-establish the metal’s traditional safe-haven role as geopolitical tensions intensify.
“Gold finished higher overnight, brushing off the headwinds of a stronger U.S. dollar and rising yields,” Sycamore said, adding that cleaner retail positioning may also be helping bullion regain its safe-haven appeal despite continued strength in U.S. equities.
Sycamore said initial signs of a base are emerging around the late-June low of $3,942. A sustained break above downtrend resistance near $4,120, followed by a move through the early-July high of $4,202, would strengthen the case for a broader recovery toward the 200-day moving average near $4,494.
He added that IG remains cautiously bullish on gold while prices hold above the late-June low, which continues to serve as the key technical reassessment level.
Silver also continued its upward move after surging more than 4% in the previous session as traders tracked geopolitical developments alongside expectations for future Federal Reserve policy.
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