Gold rose from a one-month low in Asian trading on Thursday, but continued to face headwinds from heightened geopolitical tensions and the prospect of less accommodative U.S. monetary policy.
Spot gold increased 0.5% to $4,564.12 an ounce, while gold futures climbed 0.3% to $4,575.66 per ounce by 02:12 ET (06:12 GMT). The metal had suffered losses over April as demand for safe-haven assets was outweighed by a stronger dollar and worries that the U.S.-Iran conflict could push inflation higher.
Other precious metals also recovered some ground after recent declines. Spot silver rose 1.2% to $72.2485 per ounce, and spot platinum advanced 2% to $1,918 per ounce.
Fed meeting lifts uncertainty for gold
Gold experienced a sharper drop overnight following the Federal Reserve's decision to hold interest rates, a move that was widely anticipated. Market attention, however, shifted to the policy statement itself, which revealed growing dissent within the Fed's rate-setting body over language that suggested an easing bias.
Three members of the Fed's 12-member board formally objected to portraying the stance as easing given the risks of rising inflation and the economic uncertainty linked to the Iran war. That pushback led traders to pare back expectations for any interest rate reductions in 2026, supporting a firmer dollar on Thursday as it extended gains posted earlier in the week.
The Fed meeting was also noted as the final one presided over by Jerome Powell in his current role, with Powell stating he will step down as chair but remain on the Board of Governors. His likely successor, Kevin Warsh, is expected to be confirmed in the coming weeks; Warsh has previously told Congress he made no commitments to cut interest rates.
Higher-for-longer interest rates weigh on non-yielding assets such as gold because they raise the opportunity cost of holding bullion versus interest-bearing instruments.
Investors are also focused on other central bank meetings, with the Bank of England and the European Central Bank scheduled to meet on Thursday, adding to a crowded policy calendar that could influence precious metals and broader markets.
Oil jump intensifies inflation concerns
Precious metals were further pressured by a surge in oil prices, as Brent crude climbed to a four-year high on reports that former U.S. President Trump would be briefed on additional military options regarding Iran. Those options mentioned included direct strikes, a partial forced reopening of the Strait of Hormuz, and a special forces operation to seize Tehran's uranium stores.
The resulting spike in oil heightened fears of energy-driven inflation, a factor that may prompt major central banks to adopt or maintain more hawkish policies. Since the onset of the Iran war in late-February, such inflation risks have been a notable drag on gold's appeal.
Market participants continue to weigh these intersecting influences - geopolitical risk, monetary policy signals and commodity price moves - as they evaluate near-term prospects for gold and other risk-sensitive assets.