Gold held above $4,130 an ounce on Thursday as investors kept buying recent weakness, even as Middle East tensions lifted oil and reinforced bets the Federal Reserve could keep rates high. ANZ said net long positions and ETF inflows have picked up, with dip-buying offsetting the usual drag from higher rates.
Gold held above $4,130 an ounce on Thursday as investors kept buying into recent weakness, shrugging off escalating Middle East tensions that pushed oil prices higher and reinforced expectations that the Federal Reserve could keep interest rates elevated.
At 21:32 ET, XAU/USD edged up 0.1% to $4,132.07 an ounce, while gold futures slipped 0.4% to $4,134.55. Silver was little changed at $59.71 an ounce, and platinum rose 0.5% to $1,652.58.
Middle East conflict keeps inflation in focus
Gold consolidated after rallying about 3% over the previous two sessions, as investors weighed geopolitical risk against the chance that higher energy prices could keep inflation elevated. The U.S. and Iran showed little sign of returning to negotiations, while attacks on tankers crossing the Red Sea were reported for the first time since the conflict began in late February. Yemen’s Iran-backed Houthi movement claimed responsibility, raising concerns over shipping through a key route for Saudi Arabian crude exports.
The disruption kept oil near multiweek highs, prompting markets to reassess the inflation outlook before next week’s Fed meeting. Higher borrowing costs typically weigh on non-yielding bullion by raising its opportunity cost. Investors remain divided over whether the Fed will deliver another rate hike next week, with limited guidance from Chair Kevin Warsh adding to the uncertainty.
Dip-buying supports bullion despite the rate backdrop
ANZ analysts said investors have kept rebuilding gold positions despite the prospect of higher rates, suggesting recent weakness has drawn buyers rather than fresh selling. The bank noted non-commercial net long positions have climbed to their highest level since January, while renewed inflows into gold-backed ETFs indicate some investors are using bullion to hedge against stretched equity valuations.
Gold has held above the psychologically important $4,000 level this week after tumbling from its January record high, with traders watching whether the metal can challenge resistance near $4,200.
Source: Investing.com
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