Gold remained broadly steady on Thursday after the metal hit a two-week high in the prior session, as market participants balanced fresh geopolitical risks in the Middle East against worries that rising oil costs could cement inflation and sustain restrictive U.S. monetary policy.
At 01:31 ET (05:31 GMT), XAU/USD edged down 0.1% to $4,127.99 an ounce, while Gold Futures retreated 0.5% to $4,130.62. Silver (XAG/USD) was up 0.3% at $59.88 an ounce and platinum (XPT/USD) gained 0.8% to $1,658.28. The price action followed a roughly 3% rally in gold across the preceding two sessions, with the metal consolidating those gains.
Geopolitical tensions and oil prices
Heightened hostilities between the U.S. and Iran showed scant signs of de-escalation, and reports emerged of attacks on tankers transiting the Red Sea for the first time since the conflict began in late February. Yemen's Iran-backed Houthi movement claimed responsibility for the tanker strikes, renewing concerns about the security of a key shipping lane used for Saudi Arabian crude exports.
Those disruptions contributed to keeping oil prices close to multiweek highs, prompting market participants to reassess inflation prospects ahead of next week’s Federal Reserve meeting. Because gold does not pay interest, higher borrowing costs typically increase the metal’s opportunity cost and can weigh on demand.
Monetary policy uncertainty
Investors remained split over whether the Federal Reserve will announce another interest-rate increase at its forthcoming meeting. The policy outlook was further complicated by limited guidance from Chair Kevin Warsh, leaving traders uncertain about the Fed's next move and how it might affect inflation expectations and asset allocations.
Positioning and market flows
ANZ analysts reported that investors have been rebuilding gold allocations despite the prospect of higher interest rates, interpreting recent dips as buying opportunities rather than triggers for broad selling. According to the bank, non-commercial net long positions in gold have climbed to their highest level since January. Renewed inflows into gold-backed exchange-traded funds were also cited as evidence of investors using bullion to hedge against stretched equity valuations.
ANZ noted that gold’s resilience has persisted even as rising energy prices point toward a potentially more restrictive monetary backdrop, with dip-buying helping to counteract the usual downward pressure that higher inflation expectations and elevated rates can place on bullion.
Near-term technical watch
Gold has remained above the psychologically significant $4,000 mark this week after sharply retreating from its January record peak. Market participants will be monitoring whether the metal can sustain momentum and mount a challenge to resistance in the vicinity of $4,200.
Market indicators and positioning suggest a mix of supportive flows and macro risks, leaving bullion prices sensitive to both geopolitical developments and incoming data or Fed guidance in the days ahead.