Gold Prices Rise as Geopolitical Risks Offset Hawkish Fed Signals
Gold prices moved higher on Thursday, building on the previous session’s strong rally as investors weighed ongoing geopolitical tensions and mixed signals from the Federal Reserve.
At 09:05 ET (14:05 GMT), spot gold climbed 0.4% to $4,997.17 per ounce, while U.S. gold futures rose 0.1% to $5,016.76 per ounce.
The precious metal had already surged 2.1% on Wednesday, recovering most of the losses recorded earlier in the week.
U.S.-Iran Tensions Support Safe-Haven Demand
Geopolitical uncertainty remained a major driver of gold demand. Investors continued to monitor rising tensions between the United States and Iran, including concerns over maritime security in the Strait of Hormuz and stalled nuclear negotiations.
Meanwhile, limited progress in Russia-Ukraine peace talks added to global security concerns. The persistent uncertainty helped sustain safe-haven flows into bullion.
Fed Minutes Add Policy Uncertainty
Market sentiment turned more cautious after the release of the Federal Reserve’s latest meeting minutes.
The report revealed divisions among policymakers regarding the future path of interest rates. Some officials indicated that further tightening could be necessary if inflation remains elevated. Others signaled that conditions for potential rate cuts later in the year may gradually emerge.
The possibility that U.S. interest rates could stay higher for longer supported both the U.S. dollar and Treasury yields. This dynamic typically pressures non-yielding assets like gold.
Gold often struggles in a rising rate environment because higher bond yields increase the opportunity cost of holding the metal.
Investors are now focused on the upcoming U.S. personal consumption expenditures (PCE) price index data, scheduled for release on Friday. The PCE report is the Fed’s preferred inflation measure and could provide clearer guidance on the central bank’s next policy move.
Silver Gains While Copper Prices Decline
Silver prices extended gains, rising 0.7% to $78.138 per ounce. In contrast, platinum fell 0.7% to $2,070.50 per ounce.
Industrial metals were weaker. Copper futures on the London Metal Exchange declined 1.5% to $12,733.00 per ton, while U.S. copper futures dropped 1.1% to $5.7135 per pound.
According to ING analysts, copper prices may remain volatile in the near term. Elevated inventories continue to limit upside potential, even as prices attempt to stabilize. More sustained gains could require clearer evidence of inventory drawdowns or stronger demand signals once Asian markets fully reopen.
