Gold Price Holds Above $4,130 as Fed Rate Outlook and Middle East Tensions Support Safe-Haven Demand

Gold prices remained resilient on Thursday, staying above the $4,130-an-ounce mark as investors continued buying on recent dips despite rising oil prices and growing expectations that the U.S. Federal Reserve could keep interest rates higher for longer.

Spot gold (XAU/USD) rose 0.1% to $4,132.07 per ounce, while Gold Futures eased 0.4% to $4,134.55. Silver traded nearly unchanged at $59.71 an ounce, while platinum gained 0.5% to $1,652.58.

The precious metal held onto recent gains after climbing roughly 3% over the past two sessions. Investors balanced escalating geopolitical risks in the Middle East against concerns that higher energy prices could fuel inflation and influence the Federal Reserve's next policy decision.

Tensions between the United States and Iran continued to intensify, with no indication that diplomatic negotiations would resume. Meanwhile, Yemen’s Iran-backed Houthi movement claimed responsibility for attacks on oil tankers traveling through the Red Sea, raising fresh concerns over disruptions to one of the world's key crude oil shipping routes.

The latest developments pushed oil prices toward multiweek highs, prompting investors to reassess inflation expectations ahead of next week's Federal Reserve meeting. Higher inflation could encourage policymakers to maintain elevated interest rates, a factor that typically limits gains in non-yielding assets such as gold.

Market participants remain divided over whether the Fed will implement another rate hike, with limited guidance from Chair Kevin Warsh adding to uncertainty.

Despite the challenging interest-rate environment, analysts at ANZ said investor demand for gold remains strong. The bank noted that non-commercial net long positions have reached their highest level since January, while inflows into gold-backed exchange-traded funds continue to rise as investors seek protection against expensive equity valuations and geopolitical uncertainty.

Gold has also managed to stay above the key psychological support level of $4,000 after retreating from its January record high. Traders are now watching whether continued safe-haven demand and dip-buying momentum can drive prices toward the next major resistance level near $4,200.